Intel Has Both Eyes And Brain In Driverless Car Market; Diversifies From Chipmaking With New Mobileye Acquisition

Intel just announced on Monday that it has acquired Israeli Mobileye and its autonomous vehicle technology for an unprecedented $15.3 billion. As the company diversifies from weakening chipmaking business amidst AMD Ryzen's entry, Intel finds another computer hardware manufacturer NVIDIA, currently the driverless car market leader and its newest rival.

Intel is investing heavily into the driverless car technology by acquiring Mobileye for a much-debated price tag for a startup. The Israeli company has a solid portfolio to offer including camera sensor chips, roadway mapping, in-car networking, machine learning cloud software and data fusion and management. Given the substantial contribution of Mobileye's technology, the selling price it asked seems reasonable according to Reuters. Nonetheless, the acquisition took the driverless car sector by storm as Intel bids to position itself advantageously in a rapidly booming sector.

Intel has missed out on the smartphone boom but now it aims to catch up with its 5G technology. The company now forays into a lucrative business despite shelling out an investment seven times more than its expected 2017 revenues. The chipmaking giant appeared to pay close attention to last year's Goldman Sachs prediction projecting a growth in the driver assistance systems and autonomous vehicles from 3 billion in 2015 to 96 million in 2025 and 290 billion in 2035. It is a first for Intel to invest in the said technology although it also invested in a few companies making different components for self-driving systems like sensors and robotics.

As of present, Mobileye is the provider of driver-assisted technology for a host of automotive companies like BMW, Volvo, Audi, Ford, and Nissan. It also partnered with Tesla until a public spat in 2015 regarding the death of a Tesla driver ended the relationship. Now that Intel has Mobileye, it now acquires both an eye and the brain that could significantly push the driverless vehicle technology even further as revealed by Intel chief executive Brian Krzanich.However, Mobileye will still retain its autonomy and will be integrated into Intel's Autonomous Driving Group under Mobileye chairman Amnon Shashua.

Intel and Mobileye are presently working with BMW as the newly merged companies hope to deploy a fully operational driverless car by 2021 according to CNet. However, analysts are skeptical of Intel's investment given its history of acquisitions that failed to capitalize on newly-acquired technology. Nonetheless, the competition among automakers and suppliers now heightens with the entry of a new player, which is good for the sector and for consumers in the future.