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

By Britney Nguyen

The chip maker is buying the startup and adding AI pioneer Fei-Fei Li as its chief scientist

Fei-Fei Li's World Labs is becoming part of AMD through an $8 billion deal.

Fei-Fei Li, the so-called godmother of artificial intelligence, is joining AMD.

Advanced Micro Devices (AMD) announced Monday that it is acquiring AI startup World Labs to expand its ability to build hardware and software that can support future models and applications.

World Labs, which was founded by Li, builds spatial-intelligence models that can generate and simulate physical environments using text, images and videos. The models differ from large language models such as those developed by OpenAI and Anthropic, which do not train on physical data.

As part of the deal, Li will join AMD as an executive vice president and the chip maker's chief scientist, according to a press release.

The acquisition will be conducted as an all-stock transaction, meaning that AMD will pay for World Labs using its shares as currency. The deal, valued at $8.2 billion, is expected to close by the end of the year.

AMD's stock was up 0.4% in after-hours trading Monday, after ending the day's regular session down 3.6%.

"Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving," AMD CEO Lisa Su said in a statement.

The chip maker said demand for computing infrastructure to support emerging areas such as physical AI and robotics is becoming "more diverse," and that the World Labs acquisition will give it more insight into how those types of AI are progressing.

Additionally, the deal is intended to further AMD's focus on supporting the open ecosystem, the company said, referring to AI models that have publicly available code, training data and other information that can be modified and used by any developer.

Open models are gaining traction, as they are cheaper than closed-source models such as OpenAI's GPT-6 Astra and Anthropic's Claude Sonnet 5.5.

Li said in a statement that working with AMD will give her startup "the resources and engineering depth to accelerate our research and help define the infrastructure needed for the next era of AI."

-Britney Nguyen

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09-28-26 2003ET