Intel Corp. has announced that it has agreed to acquire Mobileye NV, an Israeli car electronics manufacturer, for $15.3 billion. Mobileye currently manufactures chip-based cameras that enable semi-autonomous driving features such as assisted parking and plans to utilize this technology further for collision prevention in autonomous cars. Through the acquisition, Intel is hoping to expand its core competency in computer chip manufacturing to cover more of the tech that will run autonomous vehicles.
Both tech and auto companies are competing to control elements of the self-driving car’s manufacturing process with firms such as Tesla, Google’s parent Alphabet, and Uber all heavily involved in product development or acquisitions. General Motors spent $1 billion to acquire the self-driving company Cruise Automation, and Tesla bought the autonomous trucking firm Otto for $680 million last year. Intel’s purchase is by far the largest move related to the rapidly growing industry, as more and more entrants compete for the electronics side of the manufacturing process. The sheer size of these acquisitions indicates that the supply side of the business, the hardware and software for autonomous driving, will have the highest value add in future vehicles.
Given the vast diversity and resources of the companies competing to make consumers’ cars drive themselves, betting on who will win the race in the next five years is an optimistic gamble; however, what remains more certain is that the competition creates an opportunity for firms to share their strengths, producing a better machine than going alone. A potential partnership between the best microprocessors, lidar/radar systems, and car designers has the best chance of bringing the future of transportation into fruition, creating the car that delivers on the promises of what autonomous vehicles can do.
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