AMD makes a big bet on the next era of AI with World Labs acquisition

Advanced Micro Devices (AMD) announced on Monday that it will acquire Fei-Fei Li's AI startup, World Labs, in a $8.2 billion all-stock deal. This acquisition is AMD's attempt to gain a foothold in the emerging field of physical AI systems, which can understand and simulate the real world.

World Labs specializes in spatial intelligence, a field that focuses on enabling AI systems to model 3D environments and physical interactions. This could shape future demand for chips, software, and AI infrastructure. The startup had been working closely with AMD for the past year, jointly developing models and optimizing them for AMD GPUs.

The two companies began a deep technical partnership last year, combining AMD's hardware and software capabilities with World Labs' AI ecosystem, including foundation models and applications. Earlier this year, World Labs raised $1 billion in funding, including an investment from AMD.

Li, a renowned AI researcher known for her work in computer vision, will take on the role of executive vice president and chief scientist at AMD following the acquisition, which is expected to close by the end of 2026. She will report directly to AMD's CEO, Lisa Su. The deal is anticipated to provide AMD with deeper insights into emerging AI workloads, ultimately guiding its technology roadmaps across hardware, software, and systems.