Moving deeper into the booming artificial intelligence (AI) space, Intel Corporation INTC acquired an AI startup based in California. The terms of the deal were not disclosed.

Movidius is a maker of chips focused on integrated system-on-chip solutions that are designed to aid computer vision applications. The company also provides algorithms for things like deep learning, navigation and depth processing. Movidius has developed compact chips that already power DJI's Phantom 4 drones, enabling autonomous piloting. It has about 180 employees with offices in Silicon Valley, Ireland and Romania.

Following the news, Intel's share price rose more than 1%.

Why this Move?

We note that the deal comes at a time when Intel is shifting its focus from the traditional desktop PC market to computer vision hardware.

With this deal, Intel will be better positioned to enhance its RealSense depth-sensing cameras. The deal will help Intel to develop high-speed, low-power chips for RealSense cameras used in devices that need to be conscious of the world around them.

The company plans to deploy these sophisticated cameras in augmented, virtual and merged reality systems. Also, it plans to use these cameras in drones and robotics to help them avoid obstacles and navigate crowded spaces. Intel calls the RealSense camera “Visual Intelligence” that will also be used in its other major undertaking, autonomous vehicles.

Internet of Things (IoT) is slowly but gradually making its way into our lives. With connected devices gaining popularity, a huge amount of data is generated that needs to be interpreted to gain insights. With this move, Intel will be in an advantageous position to gain expertise in deep learning (an aspect of machine learning used in training software) that finds its application in IoT.

Bottom Line

Intel is one of the world’s leading producers of semiconductor components and digital platforms. It was once the leader of all things technology. It has descended from that throne but is slowly working its way toward regaining lost glory.

Now, Intel’s focus has shifted to a product range targeting different segments of the market, namely data center business, cloud and IoT. In order to boost its ambition of giving “human-like sight” to connected devices, the company has made several other acquisitions.

Let’s see whether these new initiatives will help Intel regain its lost position.

INTEL CORP Price

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Zacks Rank

At present, Intel has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are NVIDIA Corporation NVDA, sporting a Zacks Rank #1 (Strong Buy), and STMicroelectronics NV STM and Texas Instruments TXN, both carrying a Zacks Rank #2 (Buy).

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