Intel Corporation (INTC) is buying Israeli self-driving technology company Mobileye N.V. (MBLY) for $15.3 billion.

The deal, which research firm S&P says is the largest of 2017, values Mobileye at $63.54 per share, a premium of 34% over its closing price. Intel's acquisition marks the coming together of two important technologies related to self-driving cars. Intel CEO Brian Krzanich stated that the deal "merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car. ... The saying 'what's under the hood' will increasingly refer to computing, not horsepower." Meanwhile, Mobileye executives said that the company would incorporate Intel's self-driving technology into its products. (See also: BMW, Intel, Mobileye Ally to Build Autonomous Cars.)

Intel has ramped up its efforts in the self-driving car industry in recent times. The Santa Clara, Calif.,-based company formed an automated driving group last year and funded it with an R&D budget of $250 million. Intel has also invested in Nokia Corporation's (NOK) Here mapping division to boost its cred. Finally, the company has said that it wants to supply processors for multiple functions related to self-driving cars, from displays to communication between two self-driving vehicles.

The deal to acquire Mobileye also vaults Intel into the major leagues of artificial intelligence and serves notice to rival chip maker NVIDIA Corporation (NVDA), which has inked partnerships with prominent automakers such as Tesla, Inc. (TSLA) and Volkswagen AG (VLKAY) to sell its processors designed especially for self-driving cars. (See also: NVIDIA Could Make $1B From Tesla's Self-Driving Decree: Analyst.)

According to online publication Axios, Intel will use its stash of overseas cash to fund the acquisition. "For Mobileye, it's a huge premium (the company was valued at around $10.5 billion at market close Friday) and is vindication after Citron Research started shorting the company in February, saying that it was 'a one-trick pony' that was overvalued," wrote Dan Primack, author of a post on the site. (See also: Bernstein Slaps Intel With Downgrade.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.