AMD to Acquire AI Developer World Labs for $8.2 Billion

AMD has entered into a definitive agreement to acquire AI startup World Labs for $8.2 billion. The deal will be paid entirely in the buyer’s stock.

World Labs specializes in spatial artificial intelligence models and the development of Large World Models (LWM). The company was founded in April 2024 by renowned AI researcher and Stanford University professor Fei-Fei Li. At the beginning of 2026, it was valued at approximately $5 billion. World Labs is developing AI capable of perceiving, generating and interacting with the three-dimensional world, turning ordinary 2D images or videos into interactive 3D scenes and simulations. The company’s technology is used to train robots and autonomous vehicles and to create virtual environments that account for the laws of physics.

For AMD, this is the 2nd-largest acquisition in its history, after its $50 billion acquisition of Xilinx in 2022. The acquisition will allow the chipmaker to bring in a world-class team of researchers and experts, strengthening the company’s ability to develop hardware, software and AI systems designed for the needs of the latest models and applications.

After the deal closes, Fei-Fei Li will become AMD’s executive vice president and chief scientific officer, reporting directly to CEO Lisa Su. The entire team of leading physical AI researchers will also join AMD with her.

The deal is a direct challenge to Nvidia’s dominance in next-generation AI technology. It is expected to close by the end of 2026, subject to regulatory approval.