August 22, 2017
2017 is far from over, but it can already be stated that the Intel-Mobileye deal completed last week was one of the most important events of the year for Israel, if not the most important of all. We are not referring only to its tremendous macroeconomic effect. The billions of shekels from the deal that will stream into the state treasury will give tax revenues a big boost that will compensate to a large extent for decline in GDP resulting from weakness in important real indicators. Yes, it is a one-time event that did not even appear in the preliminary growth forecasts, but we are willing to bet that it will provide a great deal of fuel for the politicians’ public relations machinery.
What we are interested in is the long-term effects of the deal, and it is no exaggeration to say that it constitutes a strategic milestone, and even a turning point in the history of the local high-tech industry. Even before the deal, the Israeli auto-tech sector was on the map of the auto industry and the venture capital entrepreneurs, which gave it the reputation of an incubator for interesting ideas and investments in the smart car sector. The creation of Intel’s global smart car division in Israel, however, raises the Israeli industry into the big time.
Intel’s ultimate goal in the merger is much broader than the realm of sensors and machine vision in which Mobileye specializes, and Intel is making no secret about it. At the recent annual Deutsche Bank auto-tech conference, Intel’s autonomous driving group’s CEO unveiled the company’s plan to provide the auto industry with a comprehensive computer solution, entitled GO. This holistic ecosystem solution will provide all the autonomous vehicle manufacturers’ needs: development of a platform for autonomous driving based on Mobileye’s chips and Intel’s processors, 5G communications between the vehicle and the cloud, and special data centers solutions for processing and commercialization of the data produced from the vehicle.