AMD is acquiring World Labs, the spatial-intelligence startup founded by AI pioneer Fei-Fei Li, in an all-stock deal valued at $8.2 billion – the chipmaker’s second-largest acquisition ever, behind only its roughly $50 billion purchase of Xilinx.
Under the deal, Li will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su. World Labs will become a new frontier research group inside AMD, continuing its work on AI models. The transaction is expected to close by the end of 2026, pending regulatory approval and customary closing conditions.
“Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving,” said Lisa Su, chair and CEO of AMD in a statement. “Fei-Fei and the World Labs team bring exceptional research leadership and model expertise.”
World Labs is barely two years old. Li founded it in 2024 to build “world models” – AI systems that don’t merely generate text or images but simulate and reason about three-dimensional, physical space.
“We built the company guided by the foundational belief that language alone isn’t sufficient for model development. The universe isn’t made up of words; it’s made of real things,” Li said in a blog post. “So many of the most important problems for AI to solve, from science to entertainment to robotics, require models to reason over the structure and behavior of the physical world.”
Its first commercial product, Marble, shipped in November 2025 and turns a text prompt, photo, or video into an editable 3D environment. On Sept. 1, the company released Atlas, a more advanced world model designed to reconstruct navigable 3D scenes from a handful of photos.
The acquisition would give AMD a prominent AI research operation as it pushes beyond its traditional role as a supplier of processors and accelerators. The company has been expanding its AI portfolio through acquisitions and investments as it competes for a larger share of spending on the infrastructure and software used to build and run AI systems.
The deal would also deepen AMD’s challenge to Nvidia, its principal rival in data center GPUs, as AMD expands from AI chips into rack-scale systems, software and now frontier AI research. AMD has secured major Instinct GPU commitments from customers including Meta, OpenAI and Anthropic as it seeks a larger share of the AI infrastructure market.