Intel buys Mobileye for $15.3B to compete in the self-driving market

Intel buys Mobileye for $15.3B to compete in the self-driving market

The long circulating rumors turned out to be true. Yesterday Intel announced that the negotiations to buy Mobileye were a success. The merger is worth $15.3B. Intel acquired the Israeli technology innovator to gain much needed edge over Qualcomm and Nvidia, their closest competitors in the new market.

With 18 years worth of tech expertise Mobileye has accumulated a lot of valuable knowledge in building car sensors that capture and analyze nearby traffic and help prevent accidents on the road. The company manufactures cameras, systems, and sensors that improve handling of self-driving cars.

Before 2016, Elon Musk was one of the most valuable customers of the Israeli company. Mobileye sensors were installed on all Tesla Model S cars. Mobileye attracted the interest of many other technology companies and investors, too. Among them – Goldman Sachs. The global banking group decided to invest $130M in 2007.

Unfortunately, Mobileye lost Tesla as a customer after a fatal car crash in May 2016. A Tesla on autopilot equipped with Mobileye sensors failed to notice a threat and crashed into a truck. This car accident got the company a lot of bad press.

The crash did not end Mobileye's expansion into the market of self-driving cars, though. Since January 2017 the company continues to work with Intel on improving its sensors for BMW vehicles. The first cars equipped with Mobileye sensors can be expected as early as fall 2017.

The new purchase provides Intel with much needed expertise to compete with other chip manufacturers for self-driving cars – Qualcomm and Nvidia.

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