AMD to acquire Fei-Fei Li’s World Labs for $8.2 billion in major AI push

AMD is spending $8.2 billion in stock to acquire World Labs, the two-year-old AI startup founded by Fei-Fei Li, bringing one of AI’s best-known researchers inside the chipmaker as it pushes deeper into the technology behind robotics, simulation and physical AI.

The companies announced the agreement Monday. The transaction is expected to close by the end of 2026, pending regulatory approvals and customary closing conditions. 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 acquisition will bring a world-class team of researchers and model experts to AMD, strengthening its ability to develop AI hardware, software and systems around the needs of emerging models and applications,” AMD said in a news release.

The deal gives AMD something different from another chip company or software acquisition. World Labs is working on spatial intelligence, AI systems built to reason about three-dimensional environments rather than primarily processing text, images and other two-dimensional data. Its models can generate, reconstruct and simulate interactive 3D environments from text, images and video, with related research aimed at robotic learning and simulation.

That work could become increasingly relevant as AI moves from chatbots and software agents into machines that need to perceive and interact with physical environments.

“Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving,” Su said. “Fei-Fei and the World Labs team bring exceptional research leadership and model expertise. Together, we can use that insight to develop the hardware, software and systems that will power the next generation of AI and strengthen the open AI ecosystem.”

AMD is bringing AI research closer to the chips

For AMD, the acquisition points to a broader strategy than simply selling more accelerators.

AI labs are pushing into reasoning, robotics, world models and simulation, creating new computing requirements in the process. Owning a research lab working on those problems gives AMD a direct window into the workloads future chips may need to run.

World Labs was founded in 2024 by Li alongside Justin Johnson, Ben Mildenhall and Christoph Lassner. Li, a Stanford computer science professor, is widely known for her work on ImageNet, the influential image database and benchmark that helped propel advances in computer vision and deep learning.

The startup has attracted serious capital in a short period. Reuters reported that World Labs raised $1 billion in a funding round earlier this year. AMD and World Labs already had ties before Monday’s deal, including work on inference optimization and training.

World Labs’ first product, Marble, creates persistent 3D environments from inputs such as images, video, text and 3D layouts. The broader research effort aims to give AI models a richer representation of space, objects and physical interactions.

“Advancing the next generation of AI technology requires close collaboration across model research, systems and compute,” Li said. “Joining AMD will give our team the resources and engineering depth to accelerate our research and help define the infrastructure needed for the next era of AI.” 

The $8.2 billion price tag makes clear how seriously AMD views that connection.

The chipmaker is effectively bringing part of the AI research stack in-house, placing researchers who build advanced models closer to the engineers designing the processors, systems and software those models will eventually run on.

For AMD, the bet is that the next phase of the AI race will be shaped by more than who can build the fastest accelerator. It will depend on knowing what the next generation of AI actually needs from the computer beneath it.

TechStartups first covered World Labs in 2024, when Fei-Fei Li, the prominent Stanford University professor and AI researcher, raised $230 million to launch the AI startup. Two years later, AMD is buying World Labs for $8.2 billion.

World Labs founder and CEO Fei-Fei Li