AMD to buy Fei-Fei Li’s World Labs in $8.2 billion bet on ‘physical AI’

Advanced Micro Devices (AMD) announced on Monday that it plans to acquire AI startup World Labs, led by renowned AI researcher Fei-Fei Li, in a $8.2 billion all-stock deal. This strategic move aims to give AMD a foothold in research focused on physical AI systems capable of understanding and simulating the real world. The acquisition enables AMD to tap into research in spatial intelligence, a growing field centered on enabling AI systems to model three-dimensional environments and physical interactions. This could significantly influence future demand for chips, software, and AI infrastructure.

Fei-Fei Li expressed her enthusiasm for the partnership, stating that their teams worked together on model training and inference optimization using AMD GPUs. Li noted that as their collaboration deepened, it became clear that merging their AI ecosystem of software and hardware, foundation models, and applications was a natural fit. World Labs raised $1 billion in a funding round earlier this year, which included an investment from AMD.

The technology developed by World Labs aims to enhance AI systems' ability to understand and reason about the physical world, with potential applications in robotics, simulation, design, and other real-world scenarios. AMD believes that World Labs' research will provide valuable insights into emerging AI workloads, helping guide its technology roadmaps across hardware, software, and systems.

Fei-Fei Li, a prominent AI researcher known for her work in computer vision, will assume the role of executive vice president and chief scientist at AMD upon the completion of the transaction. She will report directly to AMD CEO Lisa Su. The deal is expected to close by the end of 2026.