Intel buys Mobileye for $15 billion to lead its self-driving car unit

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Intel Mobileye

Once best known for an innovative dashcam solution that could be added to any car and helped alert drivers to various dangers, Israeli vision tech powerhouse Mobileye evolved its strategy to focus entirely on OEM products and technology with automakers over the last few years. Mobileye has grown to dominate that market, landing partnerships with more than two dozen carmakers and Tier 1 suppliers. Now that approach has paid off handsomely for Mobileye’s shareholders, with an agreement to be acquired by Intel for $15 billion ($63.54 per share).

Lidars get a lot of press, but cameras are at the heart of self-driving

There has been a lot of attention paid to lidar technology for self-driving cars, especially with the recent lawsuit by Alphabet’s Waymo against Uber for alleged theft of intellectual property. But no matter how good or inexpensive a lidar unit is, it can’t tell you where lane lines are, what a road sign says, or whether a traffic light is red or green. So every self-driving solution relies on one or more cameras — although the precise role of each type of sensor varies greatly from one vendor to another.

Intel CEO Krzanich with Mobileye's Amnon at CES 2017 showcasing BMW projects

Mobileye’s gutsy move to split with Tesla

In the high-profile case of the Tesla that drove into a semi last year, Mobileye’s camera system got some of the blame. At that point Tesla was using the camera as the primary sensor for its Autopilot and safety (ADAS) systems. Mobileye quickly responded that the camera was being used in an inappropriate way, and the two companies ended their business relationship. Tesla moved on to a unique, radar-first, approach for its revamped Autopilot software.

Given Tesla’s high-profile in the industry, it was certainly a brave move by Mobileye to stick to its guns and stop working with a partner it thought was mis-using its technology. But there is no question that it helped ensure its reputation and the value of its brand.

Mobileye will run Intel’s self-driving car effort

Clearly Intel sees autonomous vehicles, along with IoT, as a big part of its future growth. Not wanting to be caught out the way it was in mobile, Intel is snapping up Mobileye and putting it in charge of Intel’s autonomous vehicle technology. Until recently, Mobileye relied on STMicroelectronics for its chip fabrication. But as part of a joint project with BMW, Mobileye has been working with Intel on new chip designs.

Intel will headquarter its self-driving car efforts in Israel, combining Mobileye and Intel’s existing Automated Driving Group under the leadership of Mobileye’s co-founder and CTO Professor Amnon Shashua.

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