Intel Corp. yesterday announced that it would buy machine vision company MobilEye NV for $15.3 billion. MobilEye reportedly has 70 percent of the market for driver-assist and collision-avoidance systems. The companies said they expect the deal to close within the next nine months.
“This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car,” said Intel CEO Brian Krzanich, referring to MobilEye and Intel’s technologies, respectively.
Santa Clara, Calif.-based Intel will be moving its autonomous driving division to Israel. This is the biggest self-driving software acquisition to date and the largest technology acquisition in Israeli history, reported Reuters.
MobilEye Technologies Ltd. was founded in 1999 and has offices in Jerusalem and New York. Amnon Shashua, co-founder, chairman, and chief technology officer of MobilEye, will lead the combined Automated Driving Group.
Merger with an eye on the market
The chip maker said it expects the market for autonomous vehicle technology to reach $70 billion by 2030. By contrast, Bain & Co. predicted that the market will be worth $25 billion by 2025, and Goldman Sachs said it would be $96 billion in 2025.
Intel also predicted that by 2020, autonomous vehicles will generate 4TB of data per day. Intel’s graphics processors and vision-based sensors will work with MobilEye’s proprietary algorithms for guidance and accident avoidance.
“This acquisition will combine the best-in-class technologies from both companies, spanning connectivity, computer vision, data center, sensor fusion, high-performance computing, localization and mapping, machine learning, and artificial intelligence,” said Intel.
Intel has already worked with MobilEye and BMW, with ambitions to launch the iNext autonomous vehicle by 2021. Intel and MobilEye have also partnered with Delphi Automotive PLC and plan to test up to 40 autonomous vehicles in the U.S. and Europe by year’s end.
Intel has been snapping up companies around machine vision and the Internet of Things. About a year ago, it bought Yogitech SpA.
In January, Intel bought a 15 percent stake in Here, a digital mapping and IoT company in Germany co-owned by Audi, BMW, and Daimler.
“Intel provides critical foundational technologies for autonomous driving, including plotting the car’s path and making real-time driving decisions,” said Krzanich. “MobilEye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers.”
“We expect the growth towards autonomous driving to be transformative,” said MobilEye co-founder Ziv Aviram. “It will provide consumers with safer, more flexible, and less costly transportation options and provide incremental business model opportunities for our automaker customers.”
Last month, MobilEye said it had installed its collision-avoidance technology in 4,500 ridesharing vehicles in New York, including some using the Uber and Lyft apps.
MobilEye’s systems also allow fleet managers to monitor driver behaviors. The company has said that its warning systems will make buses safer and will be a significant component of “smart cities,” as promoted by the U.S. Department of Transportation.
“In two decades, it will be illegal to drive, because we drivers are responsible for 93 percent of the accidents, and road fatalities are a plague — 1.5 million fatalities a year in road accidents and 50 million more injured,” said Aviram.
Cutthroat competition for chips, safety
Intel isn’t the only processor maker looking to robotics and autonomous vehicles to make up for plateauing demand for PCs, laptops, and smartphones.
“Twenty years ago, we witnessed a shift to the Web; a decade ago, it was a shift to mobile; and today, founders and investors are placing their bets for the next shifts, whether those be related to areas virtual reality, blockchain infrastructure, or artificial intelligence, among others,” wrote Semil Shah, founder of investment firm Haystack. “We won’t know which of these will win, or how big.”
MobilEye earns some skepticism
In fact, not all industry observers thought that the deal was a good one, despite — or perhaps because of — its size.
“While we are still scratching our heads at the economics of paying almost 30x 2017 revenue, the deal is done,” tweeted Citron Research. “As we all know, not all tech acquisitions turn out to be successful for the acquirer, but today is undoubtedly MobilEye’s day, and we tip our hat.”
“Intel is paying a ludicrous valuation to get its feet into the autonomous driving space,” wrote Otzar Capital Advisors. “While MobilEye is the leader now, we don’t think it was ever destined to maintain its leadership.”
“Nvidia’s GPU [graphics processing unit] is much better than MobilEye’s EyeQ,” said Celeritas Investments. “The company is the leader in the GPU industry, and its Drive PX2 and Tesla P100 cards are a sure bet on the autonomous industry.”
After a dispute over the safety of Tesla Inc.’s Autopilot, Telsa has hired people away from Advanced Micro Devices Inc. and replaced MobilEye’s system with its own Telsa Vision, which uses Nvidia Corp.’s Drive PX2.
More on Self-Driving Cars:
- A Look at the History of Autonomous Cars as Development Accelerates
- Tesla Autopilot 2.0 Fails Epicly on Winding Road
- Embark Self-Driving Trucks Take on Otto
- Machine Vision Investments Eye Safety, New Apps
- Otto’s Autonomous Truck Delivery Shows Strength of Uber-Volvo Deal
- Toyota Research Institute: Fully Autonomous Cars ‘Not Even Close’
- Self-Driving Vehicles: Autonomy Just Up the Road
- Comparing California’s Self-Driving Cars
- Self-Driving Cars Get More Fuel From Big Automakers
A crowded, winding road ahead
Technical challenges for self-driving cars include determining where lanes are despite snow or missing signage, as well as complying with local laws and smoothly shifting control to and from human drivers, who may be impaired. Numerous partnerships are addressing these issues.
TetraVue last month raised $10 million for its solid-state, high-definition 3D lidar camera that it claims will improve self-driving car safety.
And today, China’s Alibaba Group Holding Ltd. led an $18 million round of funding in WayRay SA, a Swiss startup working on augmented and virtual reality navigation and “infotainment” systems for use with self-driving cars.Read More