$8.2 Billion! AMD to Acquire Fei-Fei Li’s AI Startup

According to a joint statement released Monday, chipmaker AMD has agreed to acquire AI startup World Labs for $8.2 billion in an all-stock transaction, with the deal expected to close by the end of this year pending regulatory approval.

Founded by Stanford researcher and computer scientist Fei-Fei Li, World Labs develops “world models” designed to understand and operate within physical environments. Its technology can generate and reconstruct 3D environments, with potential applications in robotics, scientific research, and industrial systems.

For AMD, the acquisition will bring in a team of leading AI researchers, along with its models and expertise in emerging AI technologies. AMD CEO Lisa Su said combining World Labs’ software capabilities with AMD’s hardware, software, and systems expertise could accelerate AI development and help shape future hardware products.

Under the agreement, Li will join AMD as executive vice president and chief scientist, reporting directly to Su. She said the partnership will provide greater computing resources and create opportunities to accelerate the development of AI software and hardware.

The deal will also expand AMD’s AI portfolio by giving customers access to a broader range of AI models, including both open-source and proprietary systems. AMD has been expanding its data center product portfolio as it seeks to capture more of the growing demand for AI infrastructure.

World Labs was founded in 2024 and has about 70 employees. Its team includes robotics specialists from SceniX, an AI startup it acquired in July that develops software for training robots in realistic virtual environments.

AMD has strengthened its position in the processor market under Su’s leadership, but it remains behind Nvidia in AI accelerators used to train and run AI models. The World Labs acquisition reflects AMD’s broader effort to strengthen its AI hardware and software ecosystem.

Investors have viewed AMD as a major beneficiary of rising AI spending, helping drive its stock up nearly threefold this year and pushing its valuation to around $1 trillion. Nvidia remains the world’s most valuable company, with a market value above $5 trillion.