Intel’s Mobileye confidentially files for U.S. IPO

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Intel Corp’s self-driving car unit, Mobileye, confidentially filed an initial public offering in the United States on Monday, paving the way for what is expected to be one of the largest IPOs of the year.

The move to Mobileye’s list is part of Intel’s broader strategy under Chief Executive Officer Pat Gelsinger to turn its core businesses around.

Investors have invested heavily in new technologies in the global transportation sector in recent years, and Intel is looking to capitalize on the demand for autonomous vehicles by listing Mobileye’s shares.

Mobileye, which counts BMW, Audi, Volkswagen, Nissan, Honda and General Motors as customers, has been a bright spot for Intel, which faces stiff competition in the chip manufacturing segment from rivals Nvidia Corp and Qualcomm Inc.

Technology that powers driverless cars is gaining ground, even with older automakers such as Ford, General Motors and Toyota, who have invested in models with features such as driver assistance and self-driving systems.

However, Intel is looking to test capital markets at a time when investor interest in IPOs has declined significantly due to recent stock market volatility amid fears of impending rate hikes and geopolitical tensions.

Traditional US IPOs have raised about $2.33 billion since the beginning of the year, compared to $26.67 billion in the same period last year, according to Dealogic. In recent weeks, several companies have postponed or canceled their plans to go public.

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Blockbuster deal

Intel did not disclose details of the IPO, but had previously said it would receive the bulk of the proceeds from the share sale. Some of those funds will be used to build more Intel chip factories, Gelsinger said in December.

Even after the IPO, the chip giant will retain a majority stake in the unit, it had previously announced. In December, Reuters and other media outlets reported that the IPO could value Mobileye at more than $50 billion, though Mobileye may now struggle to achieve the same valuation given recent market volatility, people familiar with the matter said.

Mobileye, an Israeli company that Intel bought for about $15.3 billion in 2017, uses a camera-based system with adaptive cruise control and lane-changing assistance in driverless cars.

Founded in 1999, the company plans to eventually build its own “lidar” sensor to help its cars map a three-dimensional image of the road. It is currently using lidar units from Luminar Technologies on its first robotic axis in the meantime.

Gelsinger is under pressure from activist investors to consider divesting Intel’s chip business, but the company still plans to invest billions to expand its chip manufacturing capacity in the US and increase its market share.