In the world of driverless cars, household names like Google and Uber have raced ahead of rivals, building test vehicles and starting trials on city streets.

But when it comes to what is under the hood, a wide array of lesser-known companies are looking to supply the technology required to bring such driverless cars to the masses. And in a $US15.3 billion ($20.2 billion) deal announced on Monday, Intel made a play to corner the market on how much of that technology is developed.

The acquisition of Mobileye, an Israeli company that makes sensors and cameras for driverless vehicles, is one of the largest ever in the fast-growing sector and sets the stage for a growing competition between Silicon Valley giants as well as traditional car makers over who will dominate the world of autonomous cars.

The likes of Google and Uber already have invested billions of dollars in their own technology, signing partnerships with automakers like Chrysler and Volvo and sending test vehicles onto the road in a bid to cement their place in the industry, which is estimated to be worth $US25 billion annually by 2025, according to Bain & Co.

But by acquiring Mobileye, whose digital vision technology allows autonomous vehicles to safely navigate city streets, Intel aims to provide a complete package of digital services, looking to supply to car makers that want to offer autonomous driving, but which do not want to rely on the likes of Google for such services.

"Scale is going to win in this market," Brian Krzanich, Intel's chief executive, told investors on Monday. "I don't believe that every car maker can invest to do independent development into autonomous cars."

Intel's efforts to stamp a claim on driverless cars represents a recognition that chipmaking rivals like Nvidia and Qualcomm had moved slightly ahead in the race to provide the computing power needed for autonomous vehicles.

As part of the deal, Intel said it would buy Mobileye's outstanding shares at $US63.54 a share, a 34 per cent premium to Mobileye's closing price on Friday. The acquisition requires shareholder and regulatory approval, and is expected to close by the end of 2017.

New York Times