Advanced Micro Devices announced Monday that it has agreed to acquire World Labs, the spatial-intelligence startup founded by AI researcher Fei-Fei Li, in an all-stock transaction valued at approximately $8.2 billion. The deal is expected to close by the end of 2026, pending regulatory approvals and customary closing conditions, Reuters reported.

As part of the agreement, Li will join AMD as executive vice president and chief scientist, reporting directly to chair and CEO Lisa Su. “Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving,” Su said in AMD’s announcement.

A chipmaker buys a research lab#

The price is the second-largest acquisition in AMD’s history, behind only its roughly $50 billion purchase of Xilinx in 2022. But where Xilinx bought manufacturing capacity and a customer base, this one buys people and a research bet. World Labs builds what Li calls world models: AI systems that don’t just generate text or images but generate, reconstruct, and simulate interactive three-dimensional environments from text, image, and video inputs — aimed at helping AI systems understand and reason about the physical world, with potential uses in robotics, simulation, and design.

The price reflects how fast the startup has appreciated. World Labs came out of stealth in September 2024 with a $230 million round that valued it at $1 billion, led by Andreessen Horowitz; this February it raised roughly $1 billion more at a valuation reported near $5 billion. AMD is now paying $8.2 billion for a company barely two years old.

Fei-Fei Li speaking on stage
Fei-Fei Li, World Labs founder and incoming AMD chief scientist. Photo: pioneers.a.org (image-search).

Marble, Atlas, and a real product#

World Labs is not just a lab. In November 2025 it shipped Marble, its first commercial product, which turns a text prompt, a photo, or a video into an editable 3D environment, with paid plans running up to $95 a month. On September 1, 2026, it released Atlas, a more advanced world model built to reconstruct navigable 3D scenes from just a handful of photos — positioned, eventually, to power robot training. AMD was already an investor in the startup’s latest financing round, alongside Nvidia, and the two companies have had a technical partnership since last year to optimize World Labs’ models on AMD graphics processors.

How the stock deal works#

No cash changes hands. The number of AMD shares to be issued will be based on AMD’s volume-weighted average price over the 10 trading days ending two trading days before closing, according to the company’s 8-K filing. At Monday’s closing price of $607.87, the consideration would equal roughly 13.5 million new AMD shares — about 0.8% of the company’s 1.63 billion shares outstanding. AMD’s stock ended Monday’s regular session down 3.6% and ticked up 0.4% in after-hours trading.

A 3D-rendered cyber city, like the environments World Labs’ models generate
The kind of 3D environments World Labs’ spatial-intelligence models generate and simulate. Render: BlenderArtists community (image-search).

Beyond chatbots#

The strategic logic is about where AI is heading next. As the industry moves beyond chatbots toward systems that can reason about, simulate, and interact with the physical world, a chipmaker needs a foothold in AI-model research to tailor its hardware to those workloads, Reuters noted. AMD said demand for computing infrastructure to support emerging areas such as physical AI and robotics is becoming “more diverse,” and that World Labs’ research will help guide its technology roadmaps across hardware, software, and systems. The deal is also framed as supporting AMD’s focus on the open ecosystem of AI models with publicly available code and training data.

Sources