AMD to Buy Fei-Fei Li's World Labs for $8.2 Billion in Stock
The chipmaker's second-largest acquisition ever brings the Stanford AI pioneer aboard as executive vice president and chief scientist.
AMD said Monday it will acquire World Labs, the spatial-intelligence startup founded by AI pioneer Fei-Fei Li, in an all-stock deal valued at $8.2 billion. The transaction is expected to close by the end of the year, pending regulatory approval.
Li will join AMD as executive vice president and chief scientist. A Stanford computer science professor best known for creating the ImageNet database, which helped ignite the modern deep-learning boom, Li founded World Labs in 2024 to build models with a robust understanding of the physical world.
The purchase is the second largest in AMD's history. Only the roughly $50 billion the company paid for Xilinx in 2022 was bigger.
World Labs builds what the industry calls "world models." These are systems that generate, reconstruct and simulate interactive three-dimensional environments from text, image and video inputs, and the company also develops technology for robot learning and simulation. Its first product, Marble, creates entertainment experiences and simulated environments used to train robots. That second use matters because developers of general-purpose robots are short of the synthetic data they need to train machines that can operate in the real world.
AMD said the deal reflects a belief that AI development now requires "close collaboration across model research, systems and compute." The two companies formed an inference partnership last year. AMD intends to use World Labs' expertise to inform its chip roadmap as it tries to compete with Nvidia, whose software and hardware ecosystem dominates AI training and deployment.
Li framed the move as a way to scale. "To do this requires scaling our efforts, widening our reach, and getting closer to the hardware," she said in announcing the deal.
The acquisition fits a broader shift in the AI industry from chatbots toward physical AI, meaning models that perceive space and objects and can guide autonomous machines such as robots and self-driving cars. Chipmakers are betting that whoever ties those models most closely to silicon will have an edge, since running world models in real time demands enormous computing power.
Because the price is paid in AMD shares rather than cash, the deal's final value will move with the company's stock until closing. The all-stock structure also lets AMD add a top research team without draining the cash it needs for its own chip development. Regulators will review the transaction before it can be completed. Until then, World Labs and AMD will continue to operate separately, and the companies have said their existing inference partnership, formed last year, will carry on as the deal works its way toward closing.
