Intel Corp. is placing a major bet that it can become the leading supplier of technology to power self-driving cars, striking a deal early today to buy Mobileye NV for about $15.3 billion.

Mobileye makes chips that power the camera systems behind automated and semi-automated driving systems. Most notably, its technology is used by Tesla Inc. in its Model S vehicles, although the companies announced plans to part ways following a fatal crash last year.

Intel has been turning its focus to new markets as it confronts ongoing stagnation in the personal computer business that served as its cash cow for decades. Having mostly missed the mobile computing revolution, it’s now hoping autonomous cars, which are essentially computers on wheels, and the Internet of Things will provide new kickers for growth. Although it reported better-than-expected fourth-quarter earnings in January, it said revenues this year would be flat.

“The acquisition puts Intel in a leadership role on the autonomous and semi-autonomous car system space,” said Patrick Moorhead, president and principal analyst with Moor Insights & Strategy. “This isn’t just hardware, it’s an entire hardware and software end-to-end system from the car to the data center.”

The deal is the largest by any technology vendor in the burgeoning autonomous vehicle market. It cements an ongoing relationship between Intel and the Jerusalem-based Mobileye. The two companies announced plans to put 40 autonomous BMW cars on American and European roads by the end of this year.

Mobileye’s EyeQ 5 technology provides 360-degree vision sensors to enable a vehicle to interpret its surroundings. Mobileye is also working with BMW to develop a combination of input from vision, radar and LiDAR sensors the combine with machine learning algorithms to negotiate complex driving situations.

Intel said it will pay $63.54 a share for Mobileye’s outstanding shares, a 34 percent premium to Friday’s closing price. The deal, expected to close before the end of the year, isn’t cheap, working out to 124 times Mobileye’s operating profit of $121 million last year. For 2016, the company reported a 49 percent jump in revenues, to $358.2 million.

That make this the largest-ever acquisition of an Israeli technology company, as well as the biggest of any company in the driverless vehicle market. Intel earlier announced plans to invest $250 million in startups working on driverless vehicle technologies. The company said it expects the autonomous driving market to be worth about $70 billion by 2030.

In a note to Intel employees, Chief Executive Brian Krzanich (pictured, left, with Mobileye co-founder Amnon Shashua and Klaus Fröhlich of BMW Group) explained the size of the investment by citing the importance of data in the autonomous vehicle market’s development. “Our strategy is to make Intel the driving force of the data revolution across every technology and every industry.… Data is the new oil,” he wrote.

Mobileye works with 27 different automakers as well as most parts suppliers. The company is also working with several partners on a crowdsourced digital map of the world for use by autonomous navigation systems.

Autonomous vehicles are expected to be, in effect, massive computers on wheels. In addition to synthesizing data from dozens of onboard computers, vehicles will be in constant communication with each other and with central control points. Computer-to-computer communication has the potential to not only almost eliminate the $160 billion a year in productivity lost to traffic jams but also to speed up travel times by eliminating the need for bottlenecks like traffic lights.

Self-driving cars are beginning to get traction, although they face daunting legal and regulatory obstacles. California announced last week that it will now allow testing of fully autonomous vehicles on public roads. Michigan became the 13th state to legalize the vehicles in December.

With reporting from Robert Hof

Photo: Intel