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

Advanced Micro Devices (AMD) has announced its intent to acquire AI startup World Labs for a sum of US$8.2 billion. The deal is expected to close by the end of 2026, pending regulatory approvals. World Labs, founded by Stanford University researcher and computer scientist Fei-Fei Li, brings a team of leading researchers and innovative AI models to the table.

The acquisition is aimed at bolstering AMD's position in the competitive market for AI chips, which is currently dominated by Nvidia. Li, who will join AMD as an executive vice president and chief scientist, will bring her extensive knowledge of world models – AI software capable of running applications in the physical world. These models can generate and reconstruct three-dimensional environments, potentially aiding in the development of robots, scientific discoveries, and factory equipment.

AMD CEO Lisa Su believes that the acquisition will allow the company to build better AI by providing access to world-class talent and hardware capabilities. This strategic move follows Nvidia's recent acquisition of Hugging Face for approximately US$13 billion, further intensifying the competitive landscape in AI chip development.