
Intel buying Mobileye for up to $16B to expand in self-driving tech - itamarb
https://techcrunch.com/2017/03/13/reports-intel-buying-mobileye-for-up-to-16b-to-expand-in-self-driving-tech/
======
bhouston
$16B is a great price for Mobileye's team, but I am not sure it is the best
move for Intel. But I guess Intel will try to sell package deals to car
markers and thus use this to try to keep NVIDIA and ARM from locking up the
in-car market.

Thus it is a strategic move on Intel's part to fend off competitors rather
than reflective of the intrinsic value of Mobileye.

BTW what was Mobileye's revenue last year and profit margin? About $350M in
2016, with probably $500M in 2017 it seems. So the multiple is around 30x
revenue or so?

~~~
aub3bhat
There is no such thing as intrinsic value. There is price and price ($16B) is
determined by the market.

Talking about PE and multiples is pointless for tech companies where synergies
and rapid adoption/changes are common.

~~~
fauigerzigerk
_> There is no such thing as intrinsic value_

Intrinsic value usually refers to the present (discounted) value of future
earnings.

 _> There is price and price ($16B) is determined by the market._

How is it determined if all valuation is supposed to be pointless?

 _> Talking about PE and multiples is pointless for tech companies where
synergies and rapid adoption/changes are common_

For a public company that has existed for almost two decades it absolutely
makes sense to consider revenue multiples among other factors.

It may well be that the value of the company in Intel's hands is worth more
than it is worth for other, non-strategic, investors. I agree that there is a
lot of potential variability in tech, but that doesn't mean any fantasy price
is right just because some people buy some shares at that price (which is what
market prices mean)

------
ckastner
I thought $16B for yet another autonomous car developer R&D outfit seemed
excessive even by Intel's standards, but it looks as if Mobileye has been
providing assistant/enhancing technologies (eg collision warning systems) for
more than a decade.

This is probably not too bad a spot to be in, at least until fully autonomous
vehicles have become mainstream. They seem to be profitable, at least.

------
LeonM
Mobileye was founded in 1999, a huge leap of faith to get into the self-
driving technology back then.

~~~
phkahler
I didn't think they were really into self-driving back then. There is a whole
range of ADAS capabilities that fall short of taking control of a vehicle.

------
dharma1
Their plan is probably to build machine learning/autonomous driving chips
combining Intel's own chips/expertise, FPGA (as with their Altera acquisition)
and specialist ML chips (like Movidius that they bought recently).

$16B for Mobilieye as a route to market (they already have the relationships
and supply chains set up with car manufacturing) sounds like a lot but Intel
needs a fast track if they want to compete with Nvidia (and ARM and Qualcomm)
in that space.

~~~
Symmetry
If you've got a good enough sense of your algorithms and have a large enough
scale to be rolling your own ASIC components you probably don't need an FPGA
in you chip.

------
Animats
This after Tesla dumped Mobileye, due to Mobileye's inability to detect
stopped vehicles partially blocking a lane. (3 known crashes, one fatality.)

~~~
f137
Bullshit. Mobileye dumped Tesla after they used the Mobileye tech for the aims
it was not designed for, causing those crashes.

~~~
mrigor
According to TSLA, Mobileye didn't want their data used to train AP2
[https://electrek.co/2016/09/15/tesla-vision-mobileye-
tesla-a...](https://electrek.co/2016/09/15/tesla-vision-mobileye-tesla-
autopilot/)

------
TheGuyWhoCodes
What's Intels play here? I'm glad the mobileye team get some nice purim bonus
but we'll see in couple of years if Intel won't kill the product (and the
team)...

~~~
tw04
Diversification. They see the writing on the wall for their CPU business and
it's associated margins. They need other high-margin highly in demand tech
products to go after.

Furthermore, I'm guessing x86 has almost no representation in the self-driving
car space at the moment. They're probably hoping to change that.

~~~
phkahler
>> Diversification. They see the writing on the wall for their CPU business
and it's associated margins. They need other high-margin highly in demand tech
products to go after.

I completely agree.

>> Furthermore, I'm guessing x86 has almost no representation in the self-
driving car space at the moment. They're probably hoping to change that.

But this, not so much. x86 is way too power hungry (especially for EVs) and
way too expensive for automotive use.

~~~
gchadwick
> But this, not so much. x86 is way too power hungry (especially for EVs) and
> way too expensive for automotive use.

When you're running a electric motor that pulls power on the magnitude of 1 *
10^5 W (i.e. 100 kW+) I doubt you care about a few extra watts total power
load if you have an inefficient processor. Similarly for conventional fuel, an
extra few watts on the load is hardly going to worry the alternator.

~~~
phkahler
OK. I've worked on several EVs with 100kW motors. Lets do some math. A really
good EV takes around 200 to 250 watt-hours per mile. On the EPA urban drive
cycle you average just under 20 miles per hour. If you have 100 miles range,
that will take around 5 hours in urban driving. A 40 watt load for 5 hours is
200 watt-hours. Your Intel processor running near 100 watts is going to cost
you 2.5 percent of the range. Or if you look at costs, it's going to take that
percentage of the battery cost to run it.

Sure an EV can suck 100kW or more of power, but only for a short time. And it
can be put back into the battery via regenerative baking. Range is incredibly
sensitive to electrical loads.

~~~
cmurphycode
Let's look at it a different way. The MacBook battery is 55 watt-hours, the
Tesla battery is 100 _thousand_ watt hours. They both run their respective
workloads for a similar amount of time. So, less than a tenth of a percent?

~~~
phkahler
Don't confuse watts with watt-hours. My math stands.

~~~
tw04
Why would you assume they'd be using a CPU running at 100W???

I can get an off-the-shelf Xeon-D 8-core processor that runs at 35W and any
single core would STOMP every ARM chip on the market. If I were to build that
chip specifically for a car platform my power envelope would drop accordingly.

[https://ark.intel.com/products/family/87041/Intel-Xeon-
Proce...](https://ark.intel.com/products/family/87041/Intel-Xeon-Processor-D-
Family)

This is an embedded application... not a gaming computer. If I move to Atom -
which is what would likely be used for this sort of thing, you're talking less
than 5W.

[https://en.wikipedia.org/wiki/List_of_Intel_Atom_microproces...](https://en.wikipedia.org/wiki/List_of_Intel_Atom_microprocessors)

~~~
phkahler
>> This is an embedded application... not a gaming computer. If I move to Atom
- which is what would likely be used for this sort of thing, you're talking
less than 5W.

Correct. But Atom processors performance are no better than the competition
and don't currently have any of the common automotive peripherals (CAN for
example).

~~~
tw04
Intel is the device manufacturer... it doesn't matter if they're "better".
They get to choose what they put into their own hardware, this isn't an open
audition.

Regardless, you're missing the point. Intel has the means to get into the
space and create appropriate CPUs to compete. This acquisition makes it clear
they're planning on doing just that.

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haroldship
My wife has Mobileye in her car - it works quite well - warning you when
you're too close to the car in front or when you're wandering out of your
lane.

~~~
antoniuschan99
did it come with the car or is it aftermarket?

~~~
WhiteSource1
The collision avoidance systems (I presume OP is speaking about) is
aftermarket. That's a small part of Mobileye's business, but it is based on
the same technology.

BMWs and other high end cars have had Mobileye as OEM for a long time, but the
company itself is a bit of a legacy company and not always run well (and is
based in Jerusalem which is even more legacy) - but like many Israeli tech
stories has great tech.

~~~
exhilaration
Thanks, I wasn't aware of Mobileye's aftermarket products. For the curious:

[http://www.mobileye.com/en-
uk/products/mobileye-5-series/](http://www.mobileye.com/en-
uk/products/mobileye-5-series/)

[http://www.mobileye.com/en-
uk/products/mobileye-6-series/](http://www.mobileye.com/en-
uk/products/mobileye-6-series/)

~~~
ben1040
I've noticed a bunch of these in Uber/Lyft cars in NYC, but didn't know what
they were until I saw TechCrunch linked to a Mobileye press release about
installing 4500 of these systems:

[http://www.prnewswire.com/news-releases/mobileye-
completes-i...](http://www.prnewswire.com/news-releases/mobileye-completes-
installation-of-collision-avoidance-technology-across-4500-new-york-city-for-
hire-vehicles-300409202.html)

------
mtgx
Intel has made acquisitions of almost $40 billion in the past couple of years.
It will be interesting to see if they can make this money back as competition
becomes more fierce in the PC and server markets because of AMD and Qualcomm.

~~~
samfisher83
They have 95%+ marketshare in server chips. They have an enormous
manufacturing advantage. Even though they charge so much for their chips if
they feel threatened by Ryzen they can just lower the price of their chips to
Ryzen prices because they have a manufacturing advantage. It will just hurt
their margins. 40-50% margins forever seem pretty absurd from a pure economics
perspective.

~~~
skdotdan
But they missed mobile, and PC sales will go down (at some point). Also, ARM
on the server?

~~~
samfisher83
They didn't miss mobile. Mobile makes poor margins at least for intel so they
are not in it. PC sales are already down. Where they make a ton of their money
is data centers.

~~~
skdotdan
They did. They invested a lot in R+D on mobile processors.

------
Fricken
Yeah, they're old school. They've got all sorts of deep industry partnerships
and various driver assist and safety products. What they don't have is a Level
4 autonomous driving OS. Nobody does, it doesn't exist yet.

The whole 3 ring circus of chipmakers, OEM's, and various component suppliers
that stand to benefit from Autonomous vehicles is held aloft by a single
tentpole that doesn't actually exist yet. It's just a twinkle in the eye of
some AI genius who may very well still be an undergrad at the moment. Intel
just spent 15 gigabucks assuaging their fear of missing out.

The field of AI and deep learning in particular is changing and progressing so
fast that the experts of yesteryear are almost certainly not the people who
will build the autonomous OS of the future. There will be a lot of misspent
capital between now and the first safe, reliable, market ready, publicly
accessible fully autonomous vehicle.

~~~
frgtpsswrdlame
With all the peaks and troughs of AI over the years, don't you think we may be
due for another trough, that maybe the reason, to quote:

>the experts of yesteryear are almost certainly not the people who will build
the autonomous OS of the future

is because it will be a very long time before we have anything like a Level 4
vehicle?

~~~
Fricken
It don't believe we're headed into any kind of AI trough. Very exciting things
are happening in the field of deep learning, and the people who are best at
understanding and applying all that new theory and research are kids who never
leave the lab.

Drive.ai is an autonomous driving startup that's made up of mostly unknown
Stanford AI lab labmates who dropped out of their PHD programs to build an
autonomous OS, and what they're doing is so much more futuristic than what
anybody else is doing. They've made more progress in less time with fewer
resources than any of the big players. They've got 4 test vehicles, a team of
40 people, they're running on $12 million in venture capital, and they've
demoed capabilities that the multi-billion dollar players don't have. They're
just pure deep learning guys, they could have gone into fintech or NLP but
they went for AVs starting with a blank slate and an abundance of unproven
talent.

They're still behind Waymo and Cruise, but they're progressing at a higher
rate of speed. Everybody in this game is subject to disruption from some
nobody coming out of nowhere. Something like transfer learning drops out of
the sky, it has the potential to totally revolutionize the way one might think
about an Autonomous driving stack, and it all comes down to the genius who
figures out how to apply it effectively. That genius could be anyone, no
amount of money you spend can buy certainty in this race. Which makes it
really fun to watch.

~~~
frgtpsswrdlame
I'll just be upfront, I'm a total pessimist on the near-term possibility of
autonomous driving.

>I don't believe we're headed into any kind of AI trough.

Why? AI winter is a well-known phenomenon, AI hype has permeated tech, now
business and is starting to push into the layman's consciousness. Does it not
seem that a bust is near? The laymans perception of autonomous driving is a
magic box that will drive them around while they read their phones and that it
will be here in 5/10 years. I think that's just unsustainable. A car which can
handle northern snow, midwestern winds, country potholes, city traffic,
unpredictiable/aggressive drivers and which can do that with a lower accident
rate than humans is our generations cold fusion. Fundamental breakthroughs are
needed.

What strikes me is that we think because we can describe "driving" in one
word, we think it is a specific task, but it seems much more general and AI
developments on general learning are notoriously fraught. Your thoughts?

~~~
Fricken
I don't know what people mean when they say 'the near-term possibility of
autonomous driving'. Some people mean a car that can go everywhere and do
everything a human can. I'm thinking about robotaxis in the Bay area that
drive along established circuits and do pick-ups and drop offs in designated
zones like bus stops. That's what I'm expecting to see in the 5 year time
frame, and being able to apply autonomous driving technology to that limited
extent opens a very lucrative new market.

Any way you look at the autonomous driving problem it's a hard problem, but
every few days it seems there's some paper coming out that demos a new
optimization to one aspect or another of the autonomous vehicle development
pipeline.

The world of modular deep learning systems, where you have various parent and
child subsystems that can be quickly trained and swapped out is very much an
open and field of research and my bet is on agile teams that can build and
test models faster, and can take things from research to implementation in
less time than the competition.

Drive.ai's best trade secret is the system they have for vastly reducing the
amount of training data they need to get a result, and vastly reducing the
amount of human labour needed to annotate or clean up said training data.

I don't know what the hype is. People are expecting terminator robots or
something, that's not going to happen anytime soon. But progress in Machine
learning has been steady and driving for a decade and shows know signs of
letting up in the forseeable future, because we just keep opening up new
frontiers to explore. There's so much to do.

~~~
baq
I expect a car that can get me to and from work safely and reliably so i don't
have to waste an hour a day driving - and i hear i'm lucky that it's only an
hour.

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skdotdan
Intel has spent billions of dollars in M&A and in R+D and still has missed ARM
Holdings, just acquired by Softbank last summer.

~~~
jn1234
No way they could get that by regulators. There would be too many anti-trust
concerns.

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saosebastiao
I have to wonder what sort of market size projections support that kind of
price for what is essentially an accessory technology. There's a lot of
fanciful fantasies about self driving cars floating around, but I'm not
familiar with any of them that would support the idea of a growth market
compared to today's dumbcar market. Even today, you can buy entire car
companies for that kind of money.

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dexterdog
geohot's gonna be all fired-up.

~~~
debt
kinda funny since we was very anti mobileye and said they didn't know what
they were doing and claimed he was gonna be the ceo of a billion dollar
company etc and then the gov shuts him down immediately and mobileye gets
acquired for 16B.

dude needs to get back to hacking iphones it seems.

~~~
dexterdog
Just because they got acquired doesn't mean he wasn't right about their tech.

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krembo
Another success story from the Israeli startups scene!

~~~
desdiv
Let's not use the term "startup" for a company that's 18 years old.

------
krisroadruck
Picking up Tesla's table scraps for $16B seems like a losing move.

~~~
drcross
The split was caused by Tesla pushing targets that Mobileye was not
comfortable with. I don't think we know enough about the situation without a
report from someone inside the company but it's a little extreme to call them
Tesla's table scraps.

~~~
Fricken
Autopilot is floundering in the absence of Mobileye. It will take Tesla a
while before their much more expensive hardware suite with 8 cameras and a Px
drive chip (just the chip is worth a few thousand dollars) can match the
performance of Mobileye's EyeQ3 and single camera.

~~~
dharma1
Tesla would have been stuck at level 2/3 with Mobileye. With PX2 you have
enough compute power to do much more, and a mature and rapidly developing
GPGPU ecosystem (CUDA for ML, SLAM, SfM etc). I do think Nvidia is going to
have to bring the price of PX2 down significantly though if they want mass
market adoption.

~~~
argonaut
Autonomous driving is a software engineering/research problem, not a hardware
bottleneck.

You couldn't train a good autonomous driving agent even if you used a massive
GPU cluster.

I'm not saying better hardware doesn't help, it definitely helps incrementally
but it's not going to be enough to solve this problem.

~~~
dharma1
Absolutely agree.

However I'd wager to say that betting on a powerful Nvidia GPU/chipset
(piggybacking on general ML/CUDA ecosystem progress) to be able process
rapidly advancing autonomous driving algorithms is a more future proof bet for
Tesla than relying on already outdated hardware/algorithms from Mobileye.

------
iplaw
I can only assume that Intel will axe some of the C-Suite and attempt to
rekindle the flame with Tesla. Mobileye was functioning a bit too much like a
traditional (and glacial) vendor in the automotive industry. Tesla wanted to
develop and implemented quickly, while Mobileye became a bit too focus on the
what-ifs.

The truth is, Tesla vehicles are safer than their counterparts in almost every
situation imaginable. Mobileye screwed the pooch when they began issuing
negative press releases that attempted to push all the responsibility and
potential liability onto Tesla.

Intel is smarter than that. Intel has become fairly accustomed to implementing
and following through with aggressive development and launch cycles.

