Mobileye has been developing vision-based driver assistance systems since 1999. It has a partnership with 25 automakers with its chips installed in 15 million vehicles.
This move is coming at a time when automobile industry is prepping to incorporate advanced computing technology in cars. Not just regular automakers but also tech giants like Apple, Uber, Google, LeECo, etc., are also betting on
According to a report by Goldman Sachs, the market for advanced market for advanced driver assistance systems and autonomous vehicles would grow from about $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035.
Intel has invested in few startups in a bid to enter the market for advanced driver assistance systems, but it never made its presence felt in this industry. Therefore, it is a strategic move which will allow the company to foray into the booming market for autonomous systems.
The merger will enable Mobileye to leverage the Intel's infrastructure assets in data centers, artificial intelligence, and machine learning to enhance its current capabilities to maneuver a best in class autonomous systems.
Responding to the merger, Amnon Shashua, Mobileye’s co-founder and chief technology officer, stated: “Intel has mapping and infrastructure assets in data centers, artificial intelligence and machine learning, which complements our assets in hardware and simulators.”
“If you put all of that together you get an end-to-end solution for autonomous driving — from car to data center. It is a very powerful value proposition,” he added.
On the flip side, Intel is paying a premium of 60 times Mobileye's earnings, which may backfire, especially considering the legal roadblocks for bringing autonomous cars onto the roads and stiff competition from Qualcomm, Nvidea,etc.
Not surprisingly, after the announcement of merge, Intel's shares were down by 2.1%; whereas, Mobileye's shares soared by 28% closing at $60.62. Nevertheless, it may bear fruits in the long run for the company.
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