Updated from 9:33 a.m. with additional information.

Intel (INTC) - Get Intel Corporation (INTC) Report is boosting its connected car ambitions in a big way with the $15.3 billion purchase of Mobileye (MBLY) for $15.3 billion. After netting out Mobileye's cash, the price comes to $14.7 billion.

The bid values Mobileye at $63.54 per share in cash, a premium of more than 34% above Friday's close that may be a little rich for some shareholders. Intel shares were were down 2.3% to $35.10 on Monday, while Mobileye gained about 30% to $61.28.

The acquisition will advance Intel's position in a crowded market, which dincludes chipmakers like Qualcomm (QCOM) - Get QUALCOMM Incorporated Report , which is buying NXP Semiconductor (NXPI) - Get NXP Semiconductors NV Report for $47 billion, and Nvidia (NVDA) - Get NVIDIA Corporation Report . Intel is paying for its improved market position, however, with the price exceeding 20 times Mobileye's expected 2018 revenue.

Mobileye develops computer vision, artificial intelligence and other advanced driver assistance systems for connected cars. Intel and Mobileye already have a smart car partnership in place with automaker BMW. The three aim to have 40 autonomous test cars on the road by the end of this year.  

Mobileye also has production agreements with Audi, Ford (F) - Get Ford Motor Company Report , General Motors (GM) - Get General Motors Company (GM) Report , Nissan and Volkswagen. The car technology company sources the EyeQ chips that drive its advanced driver assistance systems from STMicroelectronics (STM) - Get STMicroelectronics NV ADR RegS Report .

While self-driving cars are still years away, the competition is already intense, with players ranging from Alphabet's (GOOGL) - Get Alphabet Inc. Class A Report Waymo and Tesla (TSLA) - Get Tesla Inc Report  to start-ups like Uber and Lyft, to major automakers like General Motors (GM) - Get General Motors Company (GM) Report  all jockeying for position. Intellectual property lawsuits have broken out in Silicon Valley as companies battle over the tech behind smart cars.

By 2030, Intel expects that the market for smart car systems, data and services will hit $70 billion. Intel CEO Brian Krzanich told investors during a Monday call that the market, including cloud and data center and network connectivity services, could reach $100 billion.

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"These cars are going to require higher and higher levels of connectivity and larger and larger amounts of data center and cloud computing as we're starting to increase the mapping requirements, the learning, and algorithm improvements," Krzanich said. Acquiring Mobileye will allow Intel to run everything from the data centers that collect car data to the cameras that interpret data on the road. 

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Mobileye NV Co-founder, CTO and Chairman Amnon Shashua said that throughout the two companies' partnership, it became apparent that they could better align software and hardware products if they combined. "The kind of deep collaboration we need to do in order to accelerate things cannot be done if we're not one organization," Shashua said.

Angelo Zino of CFRA Research agreed that there were advantages to combining the companies in a Monday note, but questioned the price."We believe [Mobileye] helps accelerate [Intel] into the high-growth potential market for fully autonomous vehicles, but view the valuation as excessive," Zico wrote, putting the valuation at 20.9 times projected 2018 sales. 

Citron Research, a short-seller that had famously criticized Mobileye's  stock starting back in 2015, wrote on Monday that "neither Citron nor any analysts who cover Mobileye saw this coming." Citron noted that Intel's offer is 30 times Mobileye's 2017 revenue. 

Mobileye would not say whether it fielded competing offers, which could explain the high price. 

"I think this is a tricky question," Shashua said on the call. "I need to ask lawyers." 

Mobileye Chief Financial Officer Ofer Maharshak pointed to the strategic fit between the companies and said, "We felt very confident with this transaction."

Intel retained Citi and Rothschild. Kenton King and Sonia Nijjar of Skadden, Arps, Slate, Meagher & Flom provided counsel to the buyer.

Charlie Uhrig, Geoff Tobin and Jeff Maxwell of Raymond James & Associates advised Moibileye, which received counsel from Morrison & Foerster lawyers James Tanenbaum, Enrico Granata, Anna Pinedo, Ned Welch and Ali Perry.