• Market Crumbs

Intel Has Autonomous Driving Ambitions

Image via kevin laminto on Unsplash

In 2017, Intel acquired Israeli autonomous driving technology company Mobileye for $15.3 billion. The acquisition gave Intel a wide range of technologies used in autonomous driving and the extensive list of car manufacturers Mobileye was already working with.

"The combination is expected to accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles," Intel said of the acquisition. "Intel estimates the vehicle systems, data and services market opportunity to be up to $70 billion by 2030."

As part of the deal, Intel made Mobileye co-founder and CTO Amnon Shashua head of Intel's autonomous driving division, based out of Israel.

This week, Intel acquired another Israeli company to bolster its position in the autonomous driving market. Intel acquired Moovit, which analyses traffic patterns and provides the data to third parties such as Uber and approximately 7,500 transit authorities. The deal values Moovit at $900 million, but Intel said the acquisition price is $840 million as a result of previous investments in the startup.

The acquisition of Moovit shouldn't come as much of a surprise. Along with being an investor in Moovit, the two companies had already been working together. Furthermore, Amnon Shashua has been on Moovit’s Board of Directors as an observer.

With auto manufacturing halted throughout much of the world, Intel viewed this is a perfect opportunity to be aggressive with its autonomous driving ambitions.

"While others working on AV R&D may slow down or downsize their ambitions given the headwinds in our economy, we saw an opportunity to acquire a valuable asset that will help us realize our vision for driverless MaaS even faster," Shashua wrote in a blog post.

Intel is clearly working towards becoming a full-service provider of technologies for autonomous driving. The deal allows Intel to integrate Moovit’s technology into Mobileye’s "mobility as a service" (MaaS) offering, which is currently used in 60 million vehicles worldwide.

"Intel’s purpose is to create world-changing technology that enriches the lives of every person on Earth, and our Mobileye team delivers on that purpose every day," Intel CEO Bob Swan said. "Mobileye’s ADAS technology is already improving the safety of millions of cars on the road, and Moovit accelerates their ability to truly revolutionize transportation — reducing congestion and saving lives — as a full-stack mobility provider."

While traditional auto manufacturers struggle with the effects of the coronavirus, it will be interesting to see if Intel's aggressive foray into autonomous driving technologies positions the company as a leader in the sector in the years to come.

Leftover Crumbs

  • Consumer debt hits record. Household debt hit a record $14.3 trillion at the end of the first quarter, an increase of 1.1% from the prior quarter and now $1.6 trillion higher than the prior record of $12.7 trillion in the third quarter of 2008. Not surprisingly, credit card debt declined as consumers remain sheltered in place. "The credit card balance decline was notably larger than the same period last year, which may reflect the early signs of decreased consumer spending due to COVID-19," the New York Fed said.

  • Victoria’s Secret loses its buyer. L Brands and Sycamore Partners have agreed to walk away from a deal that would've seen Sycamore Partners acquire a 55% stake in Victoria's Secret for $525 million. As part of the deal to terminate the acquisition, neither side will have to pay a termination fee. L Brands said it is "implementing significant cost reduction actions and performance improvements at Victoria’s Secret." L Brands hopes to have Victoria's Secret operate as a standalone company, while "establishing Bath & Body Works as a pure-play public company."

  • Neumann hits SoftBank with a lawsuit. WeWork co-founder and former CEO Adam Neumann has filed a lawsuit against SoftBank Group for walking away from a $3 billion tender offer to the startup's shareholders. The tender offer was included in the $9.6 billion rescue financing package agreed to in October that gave SoftBank control of WeWork. "In real time, SBG (SoftBank) and SBVF (SoftBank Vision Fund) are abusing their control of WeWork in an effort to stop the special committee’s meritorious lawsuit from being heard," the lawsuit read.

  • "Invest in slices." Charles Schwab is the latest brokerage to offer fractional stock shares as it has introduced "Schwab Stock Slices." Schwab markets the product as the ability to invest in any S&P 500 company with as little as $5 or buy up to 10 "slices" at once, up to a maximum of $10,000 per transaction. As with stocks, Schwab slices will also be commission free. Schwab also markets the ability to offer the fractional share to others as a gift through a custodial account.

  • Troubles continue at gyms. Just a few weeks after 24 Hour Fitness hired advisors to explore its options, including bankruptcy, Gold's Gym has filed for Chapter 11 bankruptcy protection. The company's 700 gyms globally will remain open as the company tries to restructure, with hopes of emerging from bankruptcy by August. "No single factor has caused more harm to our business than the current COVID-19 global pandemic," the company said.