AMD acquires startup cofounded by ‘godmother of AI’ Fei-Fei Li for $8.2 billion

AMD is buying World Labs, the two-year-old startup cofounded by Fei-Fei Li, in an $8.2 billion all-stock deal. The move gives AMD a stake in physical AI, a field aimed at building software that can deal with real-world movement and 3D space instead of only text on a screen.

That matters because AMD has spent years making the GPU chips used to train and run AI systems, and this purchase pulls it closer to where those systems are headed. Lisa Su, AMD’s CEO, framed the deal as a way to combine World Labs’ work on world models with AMD’s compute power and keep the open AI ecosystem moving. It also puts AMD in sharper competition with Nvidia, which has been pushing into the same area.

Li is not coming in as a figurehead. She will become executive vice president and chief scientist at AMD, reporting to Su. Li called Su a close friend and early investor in World Labs, and said the companies had already been working together in a deep technical partnership focused on training and inference optimizations on AMD’s GPU chips.

World models are a different bet from the large language models driving OpenAI, Anthropic and Google. Instead of learning from text alone, they are trained on video and other data from the physical world, with the goal of teaching AI how objects behave — like how a ball bounces. That is the sort of capability people think will matter for humanoid robots and self-driving cars.

World Labs had raised roughly $1 billion before the deal. The companies said its team will join AMD, but they did not say how many people that means. The acquisition is expected to close by the end of the year, pending regulatory approval, and AMD shares were roughly flat after hours on Monday.