AMD acquires World Labs for $8.2 billion and appoints Fei-Fei Li as executive vice president

AMD has agreed to acquire World Labs, a startup founded by Fei-Fei Li, for $8.2 billion in stock, marking the second-largest acquisition in the chipmaker’s history. The deal, announced on Monday, September 28, 2026, will see Li become AMD’s executive vice president and chief scientist, reporting to CEO Lisa Su. The transaction is expected to close by year-end, pending regulatory approval. Only the $50 billion acquisition of Xilinx in 2022 was larger.

What does World Labs do?

Stanford professor Li is known as the “godmother of AI” for creating ImageNet, an image database that fueled the advancement of deep learning.

Founded in 2024, World Labs develops world models—AI systems that generate and simulate three-dimensional environments from text, images, or video. These models learn from video and other data that depict physical space, rather than from text. The goal is to create an AI that understands how objects move, a capability essential for humanoid robots.

— Fei-Fei Li (@drfeifei) September 28, 2026

The lack of real-world data to train general-purpose robots makes synthetic data, generated by these models, a critical component of this strategy. The company’s first product, Marble, transforms photos, videos, or text into explorable 3D scenes, serving as both an entertainment tool and a means to create simulated environments for robot training. In September, World Labs launched Atlas, an early-access tool for select partners that can create virtual replicas of factories and warehouses.

In February, the startup raised $1 billion in a funding round that valued it at approximately $5 billion, a figure not confirmed by the company. Investors included AMD, Nvidia, Autodesk, Emerson Collective, Fidelity, and Sea. The acquisition price is more than 60% higher than this valuation.

Why would a chipmaker want an AI lab?

AMD says understanding cutting-edge workloads, such as those created at World Labs, will guide its chip development roadmap. “Building computing platforms for the next generation of AI requires a deep understanding of how models are evolving,” says Su.

The acquisition also brings AMD closer to Nvidia in an area where the rival has a head start. Nvidia already offers an open-source family of world models called Cosmos, while AMD had only made text and video models publicly available. The two companies had partnered since last year to optimize the training and inference of World Labs models on AMD chips.

“Without a focused hardware effort, AI is limited in efficiency and scale. And for our purposes, it remains trapped in the digital world,” Li said in a post on X. The World Labs team will continue to research models within AMD.

This marks the second billion-dollar acquisition by a chipmaker of an AI company in less than a month. On September 3, Nvidia agreed to acquire Hugging Face for approximately $12.9 billion, with a closing expected in the first half of 2027.

Frequently Asked Questions

Why did AMD acquire World Labs?

AMD acquired World Labs to expand its presence in artificial intelligence and better understand the new workloads created by advanced models. The startup’s technology will help guide the development of AMD’s next chips and computing platforms.

How much did AMD pay for World Labs?

AMD agreed to pay $8.2 billion in stock for World Labs. This deal is the second-largest acquisition in the chipmaker’s history, surpassed only by the $50 billion acquisition of Xilinx, completed in 2022.

Who is Fei-Fei Li?

Fei-Fei Li is a Stanford professor and one of the most renowned researchers in artificial intelligence. She created ImageNet, a large image database that helped drive the advancement of deep learning.

What does World Labs do?

World Labs develops world models—AI systems capable of generating and simulating three-dimensional environments from text, images, and videos—with the goal of helping machines better understand the physical world.

What are world models in artificial intelligence?

World models are AI systems trained to understand and simulate physical environments. Unlike models focused primarily on text, they learn from data such as videos and images to understand spatial relationships, movements, and object behaviors.

Why are world models important for robots?

World models can help robots understand how objects and environments function before acting in the real world, making them essential for developing humanoid robots and machines capable of performing more complex tasks.

What is Marble, from World Labs?

Marble is World Labs’ first product. It transforms photos, videos, or text into explorable three-dimensional scenes that can be used to create virtual environments or simulations for robot training.

What is Atlas, from World Labs?

Atlas is a World Labs tool that enables the creation of virtual replicas of environments such as factories and warehouses. The product was launched in early access for select partners.

What was World Labs’ valuation before AMD’s acquisition?

World Labs raised $1 billion in a February funding round that valued the startup at approximately $5 billion, according to press reports. The company has not officially confirmed this valuation.

What is the relationship between AMD and Nvidia in artificial intelligence?

AMD and Nvidia compete in the market for chips used in artificial intelligence. Nvidia leads the AI accelerator sector, while AMD aims to increase its market share by offering hardware alternatives and investing in technologies related to the most advanced models.

Why are chipmakers acquiring artificial intelligence companies?

Chipmakers aim to keep pace with the evolution of AI models because the development of these technologies directly influences hardware demand. By acquiring AI labs, companies like AMD and Nvidia can bring model development closer to the computing platforms they offer.

Did Nvidia also make a major acquisition in artificial intelligence recently?

Yes. Nvidia announced the acquisition of Hugging Face for approximately $12.9 billion. The deal is part of the company’s strategy to expand its presence in the artificial intelligence ecosystem.

Will Fei-Fei Li remain at World Labs after the acquisition?

Upon completion of the deal, Fei-Fei Li will become AMD’s executive vice president and chief scientist. The World Labs team will continue to research world models within the chipmaker.