AMD Buys Fei-Fei Li's World Labs for $8.2 Billion in All-Stock Deal

AMD is acquiring World Labs, the two-year-old physical AI startup founded by industry pioneer Fei-Fei Li, for $8.2 billion in an all-stock deal. The purchase gives the chipmaker key technology in an emerging branch of AI that could power a new generation of autonomous machines such as robots and self-driving cars.

The acquisition will help AMD design its GPU chips—crucial for training and running AI models—for evolving AI applications. It also positions the company to better compete with arch-rival Nvidia, which is expanding into physical AI as well.

"Together, we'll combine World Labs' deep expertise in AI and world models with AMD's compute leadership to power the future of AI and strengthen the open AI ecosystem," AMD CEO Lisa Su said in a post on X announcing the deal.

The deal unites two of the leading women in the AI industry: AMD's Su and World Labs' Li, who is sometimes called the "godmother of AI" for creating ImageNet two decades ago. That massive visual database helped make deep learning possible. Li will become Executive VP and Chief Scientist at AMD, reporting to Su.

"Without having a focused hardware effort, AI is hobbled in efficiency. And scale. And for our purposes, remains trapped in the digital world," Li said in a lengthy post on X about the move. She described AMD's Su as a great friend and early investor in World Labs.

The two companies are not strangers. World Labs and AMD began a "deep technical partnership" last year focused on model training and inference optimizations on AMD's GPU chips, Li said. "As our teams worked together, we realized what a natural fit it would be to bring together our AI ecosystem of software and hardware, foundation models and applications," she said.

World models represent a different approach to building intelligent software than the large language models developed by OpenAI, Anthropic, and Google. LLMs train on text-based data. World models train on data such as video that depicts the physical, three-dimensional world. The goal is AI that understands how objects move in the physical world—for instance, the way a ball bounces. Many industry insiders believe that capability will be crucial to extending AI into objects like humanoid robots.

World Labs, which raised roughly $1 billion in funding, is one of several richly-funded startups betting on world models. Yann LeCun, Meta's former chief AI scientist, launched AMI Labs in March. Nvidia has built its own world models and partnered with startups such as Wayve, which builds world models for self-driving cars.

"We built the company guided by the foundational belief that language alone isn't sufficient for model development. The universe isn't made up of words, it's made of real things," Li said in her post.

The companies said World Labs' team will join AMD as part of the deal, but did not disclose the number of employees. AMD said the deal is expected to close by the end of the year, subject to regulatory approvals.

Shares of AMD were roughly flat in after-hours trading on Monday.

With the purchase, AMD buys both a technology platform and one of the field's most prominent researchers—paying roughly eight times World Labs' total raised capital for the combination, a bet that physical AI becomes the next battleground with Nvidia.