Mar 14, 2017 06:08 AM EDT
Intel buys self-driving car company Mobileye in $15.3 billion deal on Monday. The US chipmaker plans to pay $63.54 per share in cash for the Israeli tech firm.
Mobileye is a notable leader in computer vision self-driving cars and reports say that the recent acquisition is the biggest deal entered by the Israeli tech firm. Together with Intel and German carmaker BMW, Mobileye sets on putting 40 vehicles on the road in the second half of this year. Intel expects the self-driving cars to be worth as much as $70 billion by 2030.
"This acquisition is a great step forward for our shareholders, the automotive industry and consumers," Brian Krzanich, Intel CEO, said in a statement. "Intel provides critical foundational technologies for autonomous driving including plotting the car's path and making real-time driving decisions." Krzanich believes that with Mobileye's automotive-grade computer vision, the future of self-driving cars will further accelerate and improve in no time.
Intel projects that by 2020 self-driving cars will generate 4,000 GB or four terabytes of data per day that can be mined for information. Betsy Van Hees, an analyst at Loop Capital Markets, notes of Intel's lack of presence in the automotive industry and agrees that the acquisition is a good opportunity for Intel to get into a market that has significant growth opportunities.
Timothy Carone of Notre Dame University agrees on the same analysis and says that big companies are finding ways to position themselves for change and enter the personal computer revolution. Shares of Intel fell 2.2 percent to $35.10 in New York thus the deal only makes sense. Mobileye and Intel's self-driving cars will be based in Israel and led by Amnon Shashua, who is the tech firm's co-founder, chairman and chief technology officer.
Jerusalem-based Mobileye was founded in 1999 and currently has 27 existing contracts with car makers. The company provides vision-based systems to improve road safety and reduce collisions. On the other hand, Intel is moving into self-driving cars as part of its strategy to build up its position in emerging areas of computer technology.
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