With its deal to buy top automotive vision processor supplier Mobileye (MBLY) , Intel (INTC) is signaling that cars are just as important to its long-term growth ambitions as the data center, as it looks for ways to cut its dependence on the slowing PC market. The chip giant is also signaling that its strategies for attacking each end market and fending off several hungry rivals will have much in common.

On Monday morning, Intel gave the chip industry a jolt by announcing that it's buying Mobileye for $63.54 per share, or $14.7 billion after factoring in Mobileye's net cash. The price represents a 34% premium to Mobileye's Friday close.

The deal certainly isn't cheap: Intel is paying 20 times Mobileye's 2018 consensus sales estimates of $732.1 million, and 40 times a consensus EPS estimate of $1.58. Sticker shock is doubtlessly the main reason Intel's shares fell 2.1% on Monday; Shares fell another 0.5% to $34.00 on Tuesday morning.

Making the deal more palatable: Since Mobileye is an Israeli company, Intel can mostly finance the acquisition with an offshore cash balance that stood at $13.6 billion at the end of 2016. Overall, Intel had $17.1 billion in cash and (thanks to its $16.7 billion 2016 purchase of programmable chipmaker Altera) $25.3 billion in debt.

Intel, which has already partnered with Mobileye on autonomous driving deals with BMW and major auto parts supplier Delphi (DLPH) , repeatedly stresses the product synergies it envisions from pairing Mobileye's vision processors and related algorithms with Intel's various automotive offerings. "This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car," said Intel CEO Brian Krzanich in an employee e-mail.

As highlighted by the BMW and Delphi deals, as well as the launch of its Go in-car computing platform, Intel wants to put one of its powerful (and often costly) Xeon server CPUs inside every car supporting a high level of autonomous driving; it argues the horsepower provided by the chips is needed to analyze the estimated 4TB of daily data each self-driving car will put out. Intel is also hoping Xeon CPUs, as well as complementary solutions such as Xeon Phi co-processors that will leverage technology from recently-acquired deep learning chipmaker Nervana Systems, will be used in data centers to analyze driving data and train the algorithms used by self-driving cars to navigate the real world.

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