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Intel to buy Movidius to help it win in new tech like virtual reality, driverless cars

U.S. semiconductor giant Intel is to acquire Movidius, a company that creates so-called "computer vision" chips which will play a key role in technologies from virtual reality (VR) to driverless cars, the company announced Tuesday.

Movidius makes processors that use artificial intelligence to assess the world around them. The company is already working with Chinese dronemaker DJI with its tech implemented in the Phantom 4 unmanned aircraft, giving it the ability to sense and avoid obstacles in real time and hover in a fixed position without the need for a GPS signal.

The technology could be critical in a number of emerging areas where the need to have human-like vision is necessary such as autonomous cars.

Intel makes a depth-sensing camera called RealSense. The ability to understand depth allows a machine to see the world in three dimensions.

And this is where Intel sees Movidius as the perfect fit. Its capabilities alongside Intel's RealSense cameras could open up a number of new applications and make the U.S. giant a player in these emerging sectors.

Brian Krzanich, chief executive officer of Intel Corp., displays a Project Alloy virtual reality (VR) headset during a keynote speech at the 2016 Intel Developers Forum (IDF) in San Francisco, California, U.S., on Tuesday, Aug. 16, 2016.
Michael Short | Bloomberg | Getty Images
Brian Krzanich, chief executive officer of Intel Corp., displays a Project Alloy virtual reality (VR) headset during a keynote speech at the 2016 Intel Developers Forum (IDF) in San Francisco, California, U.S., on Tuesday, Aug. 16, 2016.

"We will look to deploy the technology across our efforts in augmented, virtual and merged reality (AR/VR/MR), drones, robotics, digital security cameras and beyond," Josh Walden, senior vice president and general manager of Intel's New Technology Group, said in a blog post Tuesday announcing the acquisition.

Movidus' chips are also low-powered, making them ideal for situations where battery life is key.

Intel did not disclose the price or terms of the deal.

The U.S. technology giant sees its RealSense camera as a key part of its future offering. Last month at its developers conference, Intel unveiled Project Alloy, a virtual reality headset reference design that used RealSense for motion tracking.

While many of these emerging technologies are at an early stage and not widely commercialized, Intel will be hoping its acquisition of Movidius will help it become an early leader. The company has struggled in the smartphone space against rival Qualcomm, but this could help it take the lead in the latest technology trends, analysts said.

"Movidius will help further Intel's efforts to offer solutions around computer vision and artificial intelligence. The company is betting big on securing a place in the next wave of technology that will be instrumental across multiple areas including autonomous driving, drones, mixed reality, navigation and robotics," Ben Wood, chief of research at CCS Insight, told CNBC by email.

"The leadership team at Intel is determined not to repeat past mistakes, such as missing the smartphone opportunity."