DETROIT -- Computer chip maker Intel paid handsomely for a piece of the next big thing Monday as it offered more than $15 billion for Mobileye, an Israeli company at the forefront of autonomous vehicle technology.
The purchase, scheduled to close by year's end, creates another major player in self-driving technology as traditional automakers and tech companies vie to put the cars into public use. Most companies have predicted autonomous vehicles will be carrying people in the next three-to-five years.
The big investment by Intel validates predictions that autonomous cars will someday come in large numbers, signifying a sea change in the way we all get around, said Timothy Carone, a Notre Dame University professor who has written about the future of automation. "Major players are finding ways finding ways to position themselves for a change as seminal as the personal computer revolution," he said.
Jerusalem-based Mobileye, which makes software that processes information from cameras and other car sensors to decide where the cars should steer, has products on just about every automaker's autonomous test fleet. The combination with Intel adds hardware, more software expertise and data centers that the companies say will hasten deployment of autonomous technology, including wider use of automatic emergency braking and other technologies that already are on the roads.
Automakers and some technology companies are testing autonomous vehicles in California, Michigan and a few other states. Mobileye has partnerships with many of them, including testing cars with Intel and BMW.
The Mobileye deal will help put Intel in the driver's seat in terms of supplying vital parts of autonomous vehicles, said IHS Markit analyst Akhilesh Kona. Besides Mobileye's technology, Intel is gaining access to major automakers and parts suppliers, Kona said. "They have captured a piece of what should be a fast-growing market."
Intel and Mobileye are targeting an array of sensors and camera systems that are expected to generate annual sales of $10 billion by 2022, quintupling from about $2 billion this year, IHS estimated. Mobileye controls about 70 percent of the world market for driver assistance systems such as automatic braking, lane centering and pedestrian detection. IHS expects as many as 21 million autonomous vehicles to be sold by the year 2035.
But there are still a number of obstacles to overcome. Companies still haven't aren't certain how the cars will drive in snow or other bad weather, and it will be difficult for cars to be programmed to handle numerous local traffic customs.