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Intel to buy Israeli computing tech startup Granulate for $650m

US semiconductor giant Intel announced it was buying Israeli computing tech startup Granulate for a reported $650 million, marking the chip multinational’s seventh acquisition of an Israeli company in just over five years. Intel bought Jerusalem-based autonomous driving systems maker Mobileye in 2017 for a staggering $15.3 billion, which remains the largest tech exit for an Israeli company to date.

Intel said in an announcement Thursday that the acquisition of Granulate will “help cloud and data center customers maximize computer workload performance and reduce infrastructure and cloud costs.” The terms of the deal were not disclosed, but the Haaretz daily first reported that the agreement was valued at approximately $650 million.

Granulate was founded in Tel Aviv in 2018 by Asaf Ezra, CEO, and Tal Asaiag, who serves as CTO. The company developed an artificial intelligence-powered optimization layer that, it says, helps improve computing performance and enables better handling of workloads, reducing response times by up to 40% and bringing down computing expenses by up to 60%

The startup teamed up with Intel in 2021 to develop the Intel Workload Optimizer, an automated solution that enhances workload performance and reduces latency (delay) in cloud deployments. The tool is being leveraged by Mobileye to optimize its cloud-based autonomous driving systems and technologies including its mapping systems, AI applications, and cameras.

Granulate also participated in the first cohort of Intel Ignite, a startup program for deep tech early-stage companies in 2019. Granulate has raised about $45 million with investors including Red Dot Capital Partners, Insight Partners, TLV Partners, and Hetz Ventures.

The purchase deal is expected to close later this year 2022. Granulate’s 120 employees will be integrated into Intel’s Datacenter and AI business unit, according to the announcement Thursday.

Sandra Rivera, executive vice president and general manager of the Datacenter and AI Group at Intel, said in a company statement that Granulate’s tech strengthens Intel’s ambitions to meet growing demand in a new computing era.

“Today’s cloud and data center customers demand scalable, high-performance software to make the most of their hardware deployments,” said Rivera. “Granulate’s cutting-edge autonomous optimization software can be applied to production workloads without requiring the customer to make changes to its code, driving optimized hardware and software value for every cloud and data center customer.”

Greg Lavender, chief technology officer, senior vice president and general manager of the Software and Advanced Technology Group at Intel, added that Granulate’s “innovative approach to real-time optimization software complements Intel’s existing capabilities by helping customers realize performance gains, cloud cost reductions and continual workload learning.”

Ezra said that as part of Intel, “Granulate will be able to deliver autonomous optimization capabilities to even more customers globally and rapidly expand its offering with the help of Intel’s 19,000 software engineers.”

Approximately $100 million of Intel’s purchase price for Granulate is intended for talent retention as well as some severance packages, Haaretz said. This is Intel’s second intended acquisition of an Israeli company so far in 2022.

In February, Intel signed an agreement to buy Migdal Ha’emek-based firm Tower Semiconductor for $5.4 billion to significantly increase manufacturing output for semiconductors. Tower Semiconductor manufactures analog semiconductor chips for the consumer, industrial, automotive, mobile, infrastructure, medical, aerospace, and defense sectors. The firm has in the past worked to develop imaging technology for the US government that was used by NASA in 2018 to capture its first image within the Sun’s atmosphere.

The purchase transaction is expected to close in about 12 months, Intel said. Late last year, Intel said it was acquiring Screenovate, an Israeli developer of beaming and mirroring solutions for mobile devices, for an undisclosed amount. Intel bought Replay Technologies, a developer of 3D reconstruction technologies for large-scale sports events, in 2106, but shut it down in 2021.

In 2017, the chip multinational bought Mobileye, following up with a roughly $2 billion acquisition of artificial chipmaker Habana Labs in 2019, and transit tech company Moovit in 2020 for about $1 billion.

Mobileye has become a central part of Intel’s global operations, as it looks toward a future with fully autonomous vehicles.

Ricky Ben-David