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Intel Corp (INTC.O) Stock officially finalized its acquisition of the Jerusalem-based company Mobileye for $63.54 a share, or around $15.3 billion in total. The Israeli company’s stock saw a massive boost after the acquisition, rising 30% in Monday’s premarket.

After Haaretz, an Israeli newspaper broke the news earlier on Monday; Intel’s chief executive Brian Krzanich confirmed the news in a statement released later that day. The acquisition revealed the giant chipmaker’s intent to fight Nvidia Corp (NVDA. O) and Qualcomm Inc. (QCOM. O) for a considerable share in the global driverless systems market.

Intel Mobileye system

In a joint statement later on Monday, both companies announced that the transaction is expected to close within nine months. The financials have been settled and it is only subject to regulations and remaining closing conditions. The definitive terms and conditions agreement is published as part of Intel’s Current Report on Form 8-K and Mobileye’s Current Report on the same form.

Mobileye was cofounded eighteen years ago by Ziv Aviram, the current CEO, and Ammon Shashua. Both Morgan Stanley and Goldman Sachs took the car technology developer public in 2014. Mobileye’s reputation as a leading vision-based advanced driver-assistance systems developer reached its peak before the acquisition in 2015 when a collaboration with Tesla (TSLA) to work on Model S.

Shmuel Harlap, an early investor in Mobileye and CTO, who became a billionaire today, explains how Mobileye works:

The acquisition of Mobileye adds a large portfolio of advanced equipment including cameras, in-car networking, machine learning, censorships, cloud software, data fusion, and roadway mapping to Intel’s already extensive roster. The company is currently valued at $60.35 a share.

Earlier this year, BMW had already announced a project in development that utilizes Mobileye’s autonomous car technology. The German carmaker expects a fleet of forty cars to be ready for testing by the second half of 2017.

Sector Wide Effect

The statement is expected to fuel a global arms race between the car manufacturing giants to acquire the newly-developed vehicle technology and boost overheated valuations of vehicle-dependent startups around the globe. The market for self-driving cars includes three major companies in addition to the three mentioned above, Alphabet Inc. (GOOGL.O), Baidu Inc. (BIDU.O), and Delphi Automotive (DLPH.N).

At the end of last year, the American multinational finance company Goldman Sachs released projections that valued the market for autonomous vehicles and vision-based advanced driver-assistance systems at $96 billion in 2025 and $290 billion in 2035.

The demand numbers for driverless cars is set to hike three decades from now after advancements in the fields of mapping, simulation, virtual driving, data fusion, and high-performance computing hardware become stable enough to be reliable when released commercially.

Effect on Intel

Intel’s stock price, currently valued at $35.04 a share, is expected to continue its rise since the news broke after the multinational company announced that the acquisition will take an immediate effect on the company’s cash flow and non-GAAP earnings per share.

Intel stocks are close to the highest level
Intel stocks are around the highest level since 2014

The acquisition of the eighteen years old company is expected to position Intel among a leading technology provider for the rapidly-growing autonomous vehicle industry. The official estimations made by Intel states their expectation of at least $70 billion growth in the industry by 2030.

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