How does Intel play the role of a disruptor in the autonomous driving industry?

Source: Content from Leifeng.com , Thanks.

Compared with Nvidia, Intel can only be regarded as a small player in the autonomous driving industry. However, the chip giant has one characteristic, which is that it is willing to spend money. In the future, can it break the solid Nvidia camp and become a disruptor in the autonomous driving industry?

For Intel, spending $15.3 billion to acquire Mobileye is indeed a gamble worth a lot of money. You have to know that the company's revenue last year was only $358 million. In order to complete this acquisition, Intel may have to take on new debt.

However, for chip giants, spending big money to make big bets has become a "tradition" of the company. Previously, they borrowed $7 billion to acquire Altera (a developer of programmable chip system solutions), a deal that cost Intel $16.7 billion. Altera did not disappoint Intel, and it now contributes $2 billion in revenue to Intel every year.

But I think it will take a long time for Intel to make the same amount of money from Mobileye.

Of course, Mobileye is not a losing business. At this stage, it can at least help Intel disrupt the autonomous driving strategies of companies such as Waymo, Nvidia, Tesla and Baidu. The Israeli company founded in 1999 is a pioneer in advanced driver assistance systems (ADAS). Riding on Intel's global influence, Mobileye is expected to become a key leader in the autonomous driving industry.

Last week, Intel announced that 100 of its own autonomous driving test vehicles will officially begin road testing. These vehicles will be equipped with EyeQ processors from Mobileye, 360-degree surround view single vision sensors and AI/deep learning technologies.

Previously, Morgan Stanley said that Waymo's valuation could reach $70 billion. I believe that by 2020, analysts will also give Mobileye a nice valuation of $70 billion.

Three years later, the computing speed of Mobileye's 7nm EyeQ processor will be increased to 15 trillion times per second. With the help of Intel, the computing speed of EyeQ can even be further increased to 24 trillion times per second, truly standing on the same starting line as Nvidia's similar products.

Mobileye’s strategic plan

I think whether Intel can profit from the acquisition of Mobileye in the long term depends on how quickly the traditional auto industry accepts self-driving cars. Intel will definitely not build its own cars. It wants to be a big data and technology/solution supplier for companies such as Ford and GM. Intel/Mobileye will bring out products and services such as customized software, processors, sensors, AI technology, network technology and cloud computing platforms to attract more customers.

Yes, like Google, Tesla or Baidu, Intel can only help to promote the mainstream of self-driving cars. The real task is to take on the backbone of the automotive industry. It has factories and perfect sales channels, which are the necessary factors for the commercial success of self-driving cars.

Although Tesla is aggressive, it is still a long way to go before it can catch up with century-old companies like Ford in terms of production capacity and sales channels. Companies like Baidu and Google, which started out as search engines and advertising, will eventually need support from the automotive industry to realize their dreams of autonomous driving.

Another company that has attracted much attention in the autonomous driving industry is Apple, but I don’t think they can rise to become a new star in the autonomous driving hardware industry. Similar to Google and Baidu, Apple can only provide software or ecology, and it is probably a luxury to drive an Apple-branded autonomous driving car.

A research report by Navigant Consulting supports my view. It believes that Ford, GM and Daimler are currently in the leading position in the autonomous driving industry. Most of the companies on this list use Nvidia's Tegra GPUs, but Intel/Mobileye will eventually become Nvidia's strongest competitor in autonomous vehicle components and ecosystems.

For Intel, it is also an important task to continuously open up new markets for its Internet of Things, servers and X86 processors. In recent years, AMD has finally taken a breath and started its catch-up again. For Intel, the autonomous vehicle market is a new breakthrough for X86 processors.

In the future, Ford, GM, Daimler and other companies will definitely rely on Intel's data center to complete the task of operating and managing their own self-driving cars. In other words, the real value of Mobileye does not lie in how much revenue it can bring to Intel each year. It is a pioneer in helping Intel's X86 processor business find new markets.

Ford is ready to spend $1 billion on the self-driving car project. However, as research and development progresses, Ford may soon come to its senses and find that directly purchasing or leasing Intel/Mobileye technology can more effectively promote its self-driving strategy.

It is understood that in addition to Mobileye, Intel has also bought a lot of technology from companies such as Movidius, Nervana Systems and Itseez to make up for the shortcomings of its own Wind River system (embedded software platform). Now Intel has a complete set of intelligent self-driving car solutions, and they have the confidence to come up with a universal standard that most manufacturers are willing to accept.

It is worth noting that if the autonomous driving industry has a common standard platform or technology, it will be easier to convince regulators to accept such vehicles. At present, due to the huge differences in software, hardware, cloud computing and other solutions of companies such as Nvidia, Waymo, Tesla, Baidu and Intel, the common standard is difficult to produce.

If you remember the Betamax vs. VHS battle in the videotape industry in the 1980s, you'll have a better understanding of the current situation, except that the autonomous driving industry is even more complex than it was then.

If Intel can get on the right track in the autonomous driving industry, its losses in mobile processors will be compensated. Although Nvidia is now a leader in the autonomous driving industry with the support of many partners, Intel is not late, and there are too many variables in this industry, and anything can happen in the future.

At present, the companies that stand with Nvidia are in the testing phase, and their loyalty to the former is not unconditional. If necessary, they will turn to the Intel/Mobileye platform without looking back.

Intel's self-driving fleet has a lot to prove, and its test results will establish its position in the industry in the future. If the test results are eye-catching, Toyota and Honda may switch sides and join Intel's camp.

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