What impact did Intel’s sale of its stake in Mobileye have on the value of its remaining shareholders?

Intel has announced it has earned a hefty profit from the sale of its stake in Mobileye, a well-known Israeli developer of autonomous vehicle technology. The cash injection amounts to approximately $5.3 billion, and is a result of the fast-growing AI (Artificial Intelligence) boom that is currently sweeping the world.

Mobileye, which Intel purchased in 2017 for more than $15 billion, recently struck a deal with Volkswagen to build an automated driving system for the German car giant. This huge agreement, combined with Mobileye’s growing list of other partners, such as BMW, Tesla, and Nissan, caused Intel to consider selling off its stake.

The operation was led by Morgan Stanley, Bank of America Merrill Lynch, JPMorgan, and Citigroup, and Intel announced the completed transaction Thursday. Intel’s CEO said that the sale of its 25.9% stake in Mobileye “as the artificial-intelligence market heats up” will provide more flexibility for the company to focus on semiconductor production and data-center services, two key areas in the tech industry.

The announcement sent Mobileye’s stock tumbling by 5.3%, as the remaining shareholders saw the value of their stock decrease without Intel’s monetary backing. However, the board of directors of Mobileye immediately affirmed their commitment to maintaining and enhancing the company’s position in the autonomous vehicle industry, despite the exit of one of their major shareholders.

Overall, the sale of Intel’s stake in Mobileye marks a significant milestone in the development of the artificial intelligence industry, and proves that the high demand for machine learning and autonomous driving technology is set to continue for many years.
On Tuesday, Intel’s decision to sell shares of Mobileye, the self-driving technology company it spun off last year, sent global shares tumbling. The chip maker is set to make a hefty profit of around $1.4 billion from the sale.