The deal will allow Intel to reach the market beyond its core computer semiconductor business.

Intel has confirmed the acquirement of Israeli autonomous vehicle technology firm Mobileye for $15.3 billion. The deal allows Intel entering the direct competition with Nvidia Corp and Qualcomm Inc to develop driverless systems for global automakers and lead the list of automotive suppliers.

The pricey acquisition of Mobileye can further increase already-overheated valuations of self-driving start-ups and add fuel to the arms race among the world’s carmakers and suppliers to acquire autonomous vehicle technology.

Investment analysts expressed some concerns about the potential cooperation between Intel and Mobileye and the acquisition’s price. The industry newsletter Semiconductor Advisors wrote that Intel’s acquisition of Mobileye indicates a strategic move “very far outside its core business franchise.” Indeed, Intel hasn’t focused on the sector so far, although it has invested in at least half a dozen start-up companies developing different components for self-driving systems, from robotics to sensors.

According to B. Riley analyst Craig Ellis, the price is about 21 times expected 2017 revenue, making it more than six times more expensive than the semiconductor industry’s average three-year deal. The “very expensive transaction” is expected to improve Intel’s position in the automated driver assistance market and leave Nvidia, current leader, behind.

Intel is paying a premium of 60 times Mobileye’s earnings – it is about four times more than Qualcomm is paying to acquire the Netherlands’ NXP.

But, it is necessary to take into account that Mobileye, founded in 1999, accounts for 70 percent of the global market for driver-assistance and anti-collision systems. With the team of 660 people, the company adjusted net income of $173.3 million last year. It brings a broad portfolio that includes cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data fusion and management.

“This is a tremendous opportunity for them to get into a market that has significant growth opportunities,” said Betsy Van Hees, an analyst at Loop Capital Markets. “Mobileye’s technology is very critical… The price seems fair,” she added.

Reportedly, Intel will provide Mobileye with unusual autonomy – Intel’s automated driving group will work under direction of Mobileye Chairman Amnon Shashua, who will lead the unit from Israel.

Intel Chief Executive Brian Krzanich called the acquisition a union of “eyes of the autonomous car and the intelligent brain that actually drives the car.”

Mobileye used to supply Tesla with vision systems, but last summer the two companies had a notorious break-up after the driver of a Tesla Model S was killed while operating the vehicle using Tesla’s Autopilot system.

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