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AMD makes its second-largest acquisition
AMD has agreed to acquire artificial intelligence startup World Labs in an all-stock deal valued at $8.2 billion, the chipmaker announced. The transaction is expected to close by the end of 2026, subject to regulatory approval.
The purchase would be the second-largest acquisition in AMD’s history, behind its $50 billion takeover of chip designer Xilinx in 2022.
World Labs develops “world models,” AI systems designed to create, reconstruct and interact with three-dimensional environments using text, images and video. The technology can help machines understand and simulate the physical world, with potential uses in robotics, scientific research, industrial design and factory equipment.
The startup’s flagship technology, Marble, can generate and simulate a 3D scene from limited inputs, such as a small number of images. Such virtual environments can incorporate physical rules, allowing robots or self-driving vehicles to train before operating in real-world conditions.
Fei-Fei Li to become AMD chief scientist
World Labs founder Fei-Fei Li will join AMD as a senior vice president and chief scientist after the acquisition closes, reporting directly to CEO Lisa Su.
Li, a Stanford University computer science professor, is a prominent computer vision researcher who created ImageNet, the large-scale image database that helped accelerate advances in modern AI.
Su said better AI systems depend on understanding more of the process from beginning to end. She said AMD is acquiring World Labs to combine Li’s research team with the company’s hardware, software and systems capabilities.
Li said advancing the next generation of AI requires close cooperation among model research, computing systems and infrastructure. Joining AMD, she said, would give her team the engineering resources and computing capacity to accelerate research and help define future AI infrastructure.
AMD expands its challenge to Nvidia
Founded in 2024, World Labs has roughly 70 employees. The company raised $1 billion in a funding round earlier this year that included AMD and Nvidia. AMD was already an investor, and the two companies have worked together since last year to train models on AMD chips and optimize software.
AMD plans to use World Labs’ research to identify features needed in future AI accelerators and data center infrastructure, while shaping its hardware, software and systems road maps. The acquisition will also broaden the collection of AI models AMD can offer customers. Su said the company expects to have both open and proprietary models.
The deal represents a strategic effort by AMD to narrow Nvidia’s lead in AI accelerators. Nvidia has also expanded beyond chips into AI models and software, including through its $13 billion acquisition of open-source AI platform Hugging Face and the development of its own world model, Cosmos 3.
The competition reflects a broader convergence in the AI industry: Model developers are increasingly designing their own chips, while semiconductor companies are moving deeper into models and software. For AMD, bringing a leading AI researcher and her startup in-house is a bid to compete across more of that technology stack.
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