AMD to Acquire AI Startup World Labs for $8.2 Billion in All-Stock Deal

Industry Pulse News Desk · 2026-09-28

The acquisition integrates World Labs' physical AI models into AMD's graphics processor ecosystem, with co-founder Fei-Fei Li joining as chief scientist.

Semiconductor manufacturer AMD has entered into a definitive agreement to acquire artificial intelligence startup World Labs in an $8.2 billion all-stock transaction aimed at expanding its physical AI software capabilities.

Under the terms of the deal, World Labs co-founder Fei-Fei Li will join AMD as executive vice president and chief scientist, reporting directly to Chief Executive Officer Lisa Su. The startup’s entire technical workforce will also transfer to AMD to bolster its unified hardware and software development efforts.

World Labs, which was founded two years ago and previously raised approximately $1 billion in funding, focuses on developing spatial AI systems known as "world models." Unlike traditional text-based large language models, world models are trained on video and spatial data to help software understand how physical objects move and interact in three dimensions.

The technology is intended to serve as a foundation for next-generation autonomous systems, including self-driving vehicles and humanoid robotics. The acquisition builds upon an existing technical partnership initiated between the two companies last year, which centered on optimizing World Labs' model training and inference performance on AMD's graphics processing units.

The deal is expected to close by the end of the year, subject to customary regulatory approvals and closing conditions. AMD shares traded largely flat in after-hours trading following the announcement.