Intel has agreed to purchase Israel based MobilEye for $15.3 billion. The deal may have been inspired by QualComm’s decision last fall to purchase chip maker NXT for $47 billion. NXP is the largest maker of computer chips for the automotive industry. Computers and cars are in convergence mode and no one wants to get left behind. The MobilEye transaction is expected to close in 9 months time.
MobilEye was deeply involved with the development of the original Autopilot system for the Tesla Model S that debuted in October, 2015. But when Joshua Brown was killed on a Florida highway 8 months later while his car was operating in Autopilot mode, the relationship quickly fell apart with both companies pointing accusatory fingers at each other. That setback has not kept MobilEye from controlling 70% of the market for autonomous driving systems, however.
MobilEye is currently working closely with Delphi, one of the largest Tier One automotive suppliers. It is also cooperating with BMW on autonomous driving technology. The Bavarian automaker plans to have 40 self driving test cars on the road using MobilEye components later this year. Until recently, MobilEye has relied on chips manufactured by European chip maker STMicroelectronics but intends to use Intel’s fifth generation chips in the autonomous driving system it is developing for BMW.
In a joint press release, the two companies say the deal is expected to “bring together Mobileye’s leading computer vision expertise with Intel’s high performance computing and connectivity expertise to create automated driving solutions from cloud to car.”
“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. Together with partners and customers, Intel and Mobileye expect to deliver driving solutions that will transform the automotive industry.”
The automotive industry is seeing a lot of transformation these days as companies race to get self driving cars on the road. The only question is, who will buy them? Building autonomous cars with internal combustion engines is just flat out stupid. Only electric cars lend themselves to the self driving revolution. Yet mainstream car makers are reluctant to build many electric cars and largely refuse to pay for the infrastructure needed to help them appeal to mainstream car buyers.
The answer seems to be that the car companies themselves intend to own and operate fleets of self driving cars. Some business models suggest there is more money to be made from doing that than actually selling cars direct to consumers. We may actually be watching the beginning of the end of the private automobile.
Tomorrow’s cars will be as much computers on wheels as transportation devices. Intel thinks self driving cars will generate 4 terabytes of data every day by the year 2020 and it expects its chips to play a major role in collecting, disseminating, and processing all that digital information.