According to Intel's announcement, the buyout represents an equity valuation of $15.3 billion for Mobileye.
"The acquisition of Mobileye brings together the assets of Intel's Xeon processors, FPGAs, 3D XPoint memory, and 5G modems with the world leader in automotive computer vision", Intel CEO Brian Krzanich wrote in a letter to employees.
Intel partnered with Mobileye previous year, along with BMW, with the goal of making an autonomous auto powered by its processor's and the Israeli firm's software by 2021, and in January Mobileyeannounced it was developing a test fleet of autonomous cars together with the two firms.
But on Monday the company made its most significant move yet, announcing that it would acquire Mobileye, a major supplier of computer vision chips and sensors, for $15.3 billion. "Combined, we believe we will have the technology and the talent to deliver a leading cloud-to-car (end-to-end) solution for autonomous driving", explains Intel, in the release.
Mobileye was also an early partner in developing Tesla's self-driving technology, but it ended the collaboration publicly in 2016, citing safety concerns around the vehicles' Autopilot hands-free system.
After the Intel-Mobileye deal, a newly-combined global autonomous driving organization will be headquartered in Israel, where Mobileye is now headquartered.
Mobileye's CTO Amnon Shashua says that the company has been working with 27 different vehicle makers over autonomous driving technologies. By 2030, Intel projects that the market for smart vehicle systems, data and services will hit $70 billion.
"We expect the growth towards autonomous driving to be transformative".
"The ADG team includes systems engineers, simulators, mapping ingestion infrastructure and cloud computing with data centers, vehicle build engineers, and access to a pool of software engineers that will become part of our team".
The two companies are expected to announce the deal later today, TheMarkerreported, adding that Amnon Shashua, Mobileye's CEO would inform workers in a meeting on Monday.
As cars progress from assisted driving to fully autonomous, they are increasingly becoming data centres on wheels. Mobileye, an Israel-based maker of systems for autonomous driving vehicles, came public in August 2014 in an initial public offering (IPO) at $25 a share, and the stock reached an all-time high of more than $60 a share in July of 2015.
On January 4, the two companies announced they are joining forces to put a fleet of 40 self-driving test cars on the roads by the second half of 2017.
"Within the ADG are resident skill sets that are largely complementary to ours".
Edgar Wright's Baby Driver, first-look review at SXSW
Baby Driver opens on August 11 . " Baby Driver ", which also stars Kevin Spacey, Jamie Foxx and Eiza González, opens August 11 . This might be the first thing you're hearing about Baby Driver, Edgar Wright's first film in four years.