Autonomous car businesses are like lotto tickets for tech companies: The upside is so huge that it’s worth some risk and investment, but more often than not you walk away empty handed.
That’s why it’s interesting that Intel, recently mired in bad news, actually has an autonomous car chip and software division that’s growing. The company reported on Thursday that quarterly sales for Mobileye, its autonomous vehicle business, were up more than 120% compared to the previous year. It was only $327 million out of $18.5 billion in total revenue, but it’s Intel’s fastest-growing unit.
Intel bought Mobileye in 2017 for $15.3 billion, as a way to plant a flag in the self-driving car market. The acquisition made Intel an instant competitor to the incumbent self-driving chipmakers, like Nvidia.
More revenue gains are likely, because Intel isn’t taking an all-or-nothing approach to autonomous features. Mobileye is a key provider of semi-autonomous upgrades for carmakers like BMW, Ford, Volkswagen, and Nissan. It sells systems that provide warnings when a car accidentally leaves its lane, automatic braking, and partially automated driving in traffic jams. These don’t require a fully-functional driving AI system, but instead take the most successful elements of autonomous driving and sells them as futuristic add-ons for higher-end cars.
Chipmakers like Intel and Nvidia are in a unique position. They’re developing computer chips and core software for other autonomous vehicles companies, hoping that when a breakthrough finally happens they’ll get pulled along for the meteoric rise. Intel is also dabbling in building complete autonomous systems itself, and started testing its cars on New York City streets last month.
But Intel can still go over its skis. Those who watched Nvidia in 2018 will remember that even after the company warned investors that its revenue from selling chips to cryptocurrency miners wasn’t sustainable, and after Bitcoin’s price crashed, its stock price crashed too. This is the danger of backing a speculative tech sector. At the very least, Intel is insulated by deep ties to automakers that need smarter driving software to entice customers.
On the bright side for Intel, autonomous car companies are slowly expanding tests across the US. The startup Argo AI, heavily supported by Ford and Volkswagen, plans to start autonomous rides on Lyft’s ride-hailing platform later this year. Tesla, for better or worse, introduced its “Full Self Driving” package to eligible Tesla cars in mid-July.
As the sector continues to grow, keep an eye on Intel’s part of it. It could be the company’s driveaway success.
Dave Gershgorn
@DaveGershgorn
November 8–9: FORTUNE Brainstorm A.I. conference in Boston Join us for intimate one-on-one conversations, engaging panel discussions, and lively roundtable sessions–all designed to address how A.I. is changing the ways we do business. Apply to attend.
Arm flexes. Semiconductor company Arm has announced a breakthrough flexible microcontroller, or tiny computer chip capable of powering electronic devices. The company writes in Nature that while flexible batteries, sensors, lights, antennae, and solar panels already exist, computer chips themselves have been a roadblock to making fully-flexible devices. For the nerds out there, the microcontroller is a fully-functional 32-bit Arm Cortex-M CPU, which are already incredibly popular in consumer devices.
Alphabet gets into robots (again). The Google parent company is launching another business, called Intrinsic, which will make software for industrial robots. It was formerly a part of Alphabet's X lab and is now graduating into its own company, much like self-driving car outfit Waymo or life sciences startup Verily. The new robot company will aim to make industrial robots more accessible to "millions more businesses, entrepreneurs, and developers." Read more about the new company in this Fortune exclusive with new Intrinsic CEO Wendy Tan White.
Hack-be-gone. The hack that crippled more than 1,500 business now has an antidote. Remote management company Kaseya has finally gotten a "master decryptor" to help businesses still struggling with the REvil ransomware hack initiated on July 4. The hack locked away a person or business' files unless they paid a ransom, but with this tool companies can recover files themselves.
A robotic supermarket. Instacart plans to build automated fulfillment centers for groceries, in an effort to speed up its grocery delivery service, according to Bloomberg. The company will partner with supermarkets to stock the warehouse shelves, and use robots to pick the right food for a delivery order. Instacart workers will then pack and deliver the food.
AI is still red hot. Investors dropped more than $20 billion on AI companies in Q2 of 2021 alone, a new report from CB Insights estimates. On top of that, 24 companies reached "unicorn" status, reaching $1 billion valuations for the first time.
Make data informed decisions in real-time. Fast markets, fierce competition, and data complexity. There's never been a greater need for Active Intelligence. Get 5 expert takes
Enter the metaverse. Facebook CEO and Internet's most-dunked-on hydrofoil surfer Mark Zuckerberg talked about his idea for a future "metaverse," linking virtual and augmented reality with mobile computing and the real world. It's honestly a bit half-baked, so I suggest you read it yourself if you want to know what's on Zuck's mind lately.
The metaverse is a vision that spans many companies — the whole industry. You can think about it as the successor to the mobile internet. And it’s certainly not something that any one company is going to build, but I think a big part of our next chapter is going to hopefully be contributing to building that, in partnership with a lot of other companies and creators and developers. But you can think about the metaverse as an embodied internet, where instead of just viewing content — you are in it. And you feel present with other people as if you were in other places, having different experiences that you couldn’t necessarily do on a 2D app or webpage, like dancing, for example, or different types of fitness.
I think a lot of people, when they think about the metaverse, they think about just virtual reality — which I think is going to be an important part of that. And that’s clearly a part that we’re very invested in, because it’s the technology that delivers the clearest form of presence. But the metaverse isn’t just virtual reality. It’s going to be accessible across all of our different computing platforms; VR and AR, but also PC, and also mobile devices and game consoles.
A mutation of Olympic proportions. I'm extremely excited for the Olympics, which officially kicked off today, but can't help but wonder if it's still too soon to gather representatives from the entire world all in one place. And then send them all home after.
As this piece in Wired explains, having athletes catch Covid-19 isn't the only concern. It's also athletes trading variants of the virus, and potentially act as a breeding ground for more new variants. Read more in the story below:
A giant gathering with people from many different populations, almost certainly carrying different versions of the virus, is exactly the kind of place that makes super-spreader events and the exchange of new variants more possible. It might—emphasis on might—even make possible the development and spread of new, worse variants. “Personally, if I were in charge of the Olympics in Japan, the risk of transmission getting established would be too high for me. Maybe their assumption is, if it does spill over, they can bring it under control again without risking an epidemic,” Scarpino says. “I may not agree with that, but I think where we diverge in the cost-benefit calculations of holding the Olympics versus the spread of Covid locally in Japan is when we get into the conversation of what this might mean for the evolution of the virus itself.”
The Billionaire Space Race
In the past two weeks, both Sir Richard Branson and Amazon's Jeff Bezos flew into space on their own rockets. Space tourism, they say, is just around the corner: Anyone who can pay the price of admission can now travel outside our home planet. In the flurry of headlines that followed, it’s easy to forget these billionaire-astronauts – along with Elon Musk – have been investing heavily in the commercial space industry for nearly two decades. There’s an obvious, immediate business case: Satellites help fuel the information economy. But the longer-term ambitions of a commercial space sector are deeply imaginative, if not fanciful. Human colonies on the moon, earth-orbiting-hotels, mining asteroids for precious metals.
On today’s Brainstorm, Michal Lev-Ram and Brian O’Keefe discuss the rise of the commercial space sector and the technological breakthroughs it hopes to realize.
Christian Maender, director of in-space manufacturing and research at unicorn Axiom Space, describes the company’s plans to build the first private space station.
Peter Hughes, the Center Chief Technologist for NASA’s Goddard Space Flight Center applauds the space-minded venture capitalists. Up in orbit, he says, the more the merrier.
Also in the episode, Mehak Sarang, research associate at Harvard Business School, discusses the limitless possibilities for scientific and technological breakthroughs that space affords. Listen to the podcast here.
Thanks for reading. If you liked this email, pay it forward. Share it with someone you know: Did someone share this with you? Sign up here. For previous editions, click here. To view all of Fortune's newsletters on the latest in business, go here. |
