By Heather Clancy
March 14, 2017

Greetings from northern New Jersey, where the leprechaun on my St. Patrick’s Day flag is dancing in wind gusts from the late-season winter storm Stella. Heather Clancy here, filling in for Adam Lashinsky, who is experiencing technical difficulties this morning.

The snowplows navigating my dead-end street could really benefit from the driver assistance technology from Mobileye, the Israeli company snapped up for $15 billion on Monday by Intel in the latest example of the closer ties that Silicon Valley is building with the automotive industry. Mobileye, which has deals with nearly two dozen car companies including Audi, BMW, General Motors, and Ford, is the top supplier of the computer vision chips that help warn against collisions, like getting too close to a curb while parking (or plowing).

As Fortune‘s Kirsten Korosec writes in her analysis of the deal, the acquisition should improve Intel’s post position in the self-driving vehicle race very quickly. The two companies have already been working together—they previously announced a plan to put a test fleet of several dozen autonomous BMW vehicles on the road before the end of 2017. While there are many laps to go before the finish of that one, Mobileye has the potential to contribute to the chip giant’s bottom line immediately—its net profit margin last year was 30%.

Intel isn’t exactly new to the automotive chip business. Its Wind River division, which makes software and hardware for navigation and diagnostics, will factor here. So will several other acquisitions it has made in the past two years, including programmable chipmaker Altera ($16.7 billion), safety tech company Yogitech, machine vision company Itseez, and artificial intelligence firm Movidius.

But rivals Nvidia and Qualcomm are stepping on the gas with their own autonomous vehicle initiatives. Intel needs to gain momentum before it can put them in the rear-view mirror, and Mobileye could be the fuel it needs.

Heather Clancy


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