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While most tech speculators were watching their Snap Inc. (NYSE:SNAP) shares sink to new lows yesterday, a much more important piece of news rattled the tech sector.
Intel Corp. (NYSE:INTC) announced early Monday morning that it would buy a small company called MobilEye NV (NYSE:MBLY) for the price of $15.3 billion. That’s a 35% premium to Mobileye’s close last week, helping investors cash out right near all-time highs as the stock rocketed in Monday trading.
But this story runs deeper than a big payout for MobilEye shareholders. You might have heard of Mobileye’s automated driving technology. The company is one of the leaders in making self-driving cars a reality. And the Intel acquisition proves the race is on to bring a fully autonomous car the American consumer.
Anyone tuned in to the tech world knows that the development of self-driving vehicles is a heck of a lot more important (and potentially profitable) than a social network IPO…
Every single carmaker from Ford to Tesla is working on making autonomous vehicles a reality. The race to a fully-functioning self-driving car has sparked a buyout frenzy when it comes to the technology that will make this dream a reality…
“General Motors Co. last year spent $1 billion to acquire Cruise Automation to expedite its self-driving program. Uber bought self-driving truck maker Otto for $680 million in August. Alphabet, Google’s parent, recently sued Uber for allegedly stealing trade secrets related to that deal,” the Wall Street Journal reports. “In January, Intel said it would buy a 15% stake in digital mapmaker Here International B.V., joining with its other core shareholders, BMW, Daimler AG and Volkswagen AG ’s Audi unit, to develop navigation technology for self-driving cars.”
As you can see, the competition in autonomous vehicle technology is heating up fast.
That’s where Intel comes in…
“There’s one thing Intel doesn’t want to do – and that’s get left in the dust in emerging tech markets,” our own tech maven Ray Blanco explains. “The PC market, long an Intel stronghold, has been flat for years. Intel needs growth. The company is adapting by moving aggressively into fast-growing tech areas.”
It’s true. The old-school high tech firm has plunked down some serious coin when it comes to artificial intelligence and autonomous driving. MobilEye was the pure play Intel needed to get its foot firmly in the door of the self-driving tech world. As Ray told us, MobilEye has established a strong position as an early mover in the self-driving car arena.
In fact, MobilEye just signed a deal with BMW to incorporate its tech in 2018, following on earlier deals with Volkswagen. Ray also notes that Mobileye has relationships and partnerships with nearly all the world’s leading automakers.
There are plenty of distractions out there in the tech world. But companies at the forefront of autonomous driving technology are working on what will become one of the biggest revolutions of our time. Once self-driving vehicles are on the road, industries from trucking to insurance will begin to feel the heat. The ramifications are huge.
Forget about trendy social media “tech” like Snapchat. The real money will be made elsewhere…
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This story originally appeared in the Daily Reckoning