• by Thom Forbes  @tforbes, March 14, 2017

Intel signaled that it was moving into the passing lane of the Autonomous Driving 500 yesterday in announcing its definitive agreement to acquire the Israeli technology firm Mobileye for $15.3 billion. It estimates the vehicle systems, data and services market will be worth about $70 billion by 2030.

“The acquisition of Mobileye brings together the assets of Intel’s Xeon processors, FPGAs, 3D XPoint memory, and 5G modems with the world leader in automotive computer vision,” says Intel CEO Brian Krzanich in a letter to his employees. Then, more colloquially for the non-engineers on staff and reporters everywhere, he writes: “This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car.”

Krzanich expands on that in an interview with the Wall Street Journal’s Ted Greenwald: “You can think of the car as a server on wheels. The average autonomous car will throw out four terabytes of data a day, so this is one of the most important markets and one of the fastest-growing markets.”

The deal is expected to close by the end of the year if all goes well with regulators and shareholders. 

“The pricey acquisition of Mobileye could propel the world's largest computer chipmaker into the front ranks of automotive suppliers at a time when Intel has been reaching for market beyond its core computer semiconductor business,” write Reuters’ Tova Cohen, Ari Rabinovitch and Paul Lienert. “It also promises to escalate the arms race among the world's carmakers and suppliers to acquire autonomous vehicle technology, and could fuel already-overheated valuations of self-driving start-ups.”

It has some formidable competitors in the tech world, of course, as we’ve been covering over the years.

“Intel is joining a race to create autonomous vehicles that has accelerated recently as unconventional auto companies have jumped in, sparking bidding wars for companies that specialize in self-driving gear or software. Besides Intel, Tesla Inc., Alphabet Inc.’s Google and Uber Technologies Inc. also have made big bets on car technology,” the WSJ’s Greenwald writes. “Their entry has created a complex web of relationships between Silicon Valley, Detroit and other automotive hubs that has shifted the center of gravity in the global car business.”

Not that Intel is a rookie driver. 

“While Intel still earns more than half of its annual revenue from traditional computing chip-making operations, the company’s sales from its ‘internet of things’ division, a unit that includes its burgeoning automaking team, grew 15% in 2016, to $2.6 billion, according to regulatory filings,” writes Mark Scott for the New York Times.

“Over the last 18 months, Intel has signed partnership deals with BMW and Delphi Automotive, an auto parts supplier, to expand its presence in the field. It also acquired a 15% stake in Here, a digital mapping business owned by a consortium of German automakers, and announced last year that it would invest $250 million in start-ups working on driverless car technologies,” Scott continues.

Among other things, Mobileye’s technology provides warnings for collisions. “Tesla originally used Mobileye chips for its autopilot system, but severed ties with the company after a fatal accident where Mobileye’s technology was unable to distinguish between a laterally crossing truck and the sky behind it,” Tom Warren reminds us in The Verge.

In a letter its own employees, “Ziv and Amnon” (founders Ziv Aviram and Amnon Shashua) first “apologize for springing this on you out of the clear blue sky” due to securities laws and then write that “the transaction is unique in the sense that instead of Mobileye being integrated into Intel, Intel’s Automated Driving Group (ADG) will be integrated into Mobileye.”

Mobileye was founded in 1999 and initially developed camera-based technology for warning of road hazards, according to the Israeli business publication Globes, which named it “Israeli company of the decade” last year.

In an interview the two gave Globes at the time, Aviram said, “In two decades, it will be illegal to drive, because we drivers are responsible for 93% of the accidents, and road fatalities are a plague — 1.5 million fatalities a year in road accidents and 50 million more injured. I recently calculated the economic damage at $600 billion. It's a plague of the modern world, and we have somehow come to accept it with equanimity. There's a cure that will save 1.5 million lives and 50 million injured, so the autonomous car is a wave that has begun, and cannot be stopped. It won't be stopped.”

And it will apparently have Intel Inside®.