Intel buys Israeli computer technology startup Granulate for reported $650m

US semiconductor giant Intel has announced it is buying Israeli computer technology 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, marking the largest tech exit for an Israeli company to date.

Intel said in an announcement Thursday that the Granulate acquisition will “help cloud and data center customers maximize compute workload performance and reduce infrastructure and cloud costs.”

The terms of the deal were not disclosed, but Haaretz newspaper first reported that the deal 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-based optimization layer that it says helps improve computing performance and enable better workload handling, reduce response times by up to 40% and reduce computing costs by up to 60%

The startup partnered with Intel in 2021 to develop the Intel Workload Optimizer, an automated solution that improves workload performance and reduces latency (lag) in cloud deployments. The tool is used 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 approximately $45 million from investors including Red Dot Capital Partners, Insight Partners, TLV Partners and Hetz. ventures.

The Granulate Team. Israeli computer technology startup Granulate will be acquired by Intel. (Ravit Turkiya)

The purchase agreement is expected to be completed later this year in 2022. According to Thursday’s announcement, Granulate’s 120 employees will be integrated into Intel’s Datacenter and AI business unit.

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

“Today’s cloud and data center customers demand scalable, high-performance software to get the most out of their hardware deployments,” said Rivera. “Granulate’s advanced autonomous optimization software can be applied to production workloads without the need for the customer to make code changes, generating 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 achieve performance improvements, cloud cost reductions and continuous learning from the workload.”

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

About $100 million of Intel’s purchase price for Granulate is for talent retention and some severance pay, Haaretz said.

This is Intel’s second planned acquisition of an Israeli company to date in 2022.

In February, Intel signed an agreement to buy Migdal Ha’emek-based company Tower Semiconductor for $5.4 billion to significantly increase semiconductor production.

Tower Semiconductor headquarters in Migdal Haemek, Israel, Wednesday, Feb. 16, 2022. (AP/Ariel Schalit)

Tower Semiconductor produces analog semiconductor chips for the consumer, industrial, automotive, mobile, infrastructure, medical, aerospace and defense sectors. The company has historically worked on developing imaging technology for the US government that was used by NASA in 2018 to capture its first image in 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 sporting events, in 2106, but closed it in 2021.

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

Mobileye has become a central part of Intel’s global business as it looks to a future of fully autonomous vehicles.

Agencies contributed to this report.

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