AMD Acquires Fei-Fei Li's World Labs for $8.2 Billion, Its Second-Largest Deal

AMD agreed to acquire Fei-Fei Li's World Labs for $8.2 billion in an all-stock deal, its second-largest acquisition ever after Xilinx. Li will join AMD as executive vice president and chief scientist, reporting to CEO Lisa Su.

Technology

uristocrat

September 30, 2026 3 min read

AMD Acquires Fei-Fei Li's World Labs for $8.2 Billion, Its Second-Largest Deal — Dr. Fei-Fei Li, who will join AMD as executive vice president and chief scientist. Photo: ITU Pictures / Wikimedia Commons, CC BY 2.0

AMD agreed to acquire World Labs, the San Francisco-based AI lab co-founded by Dr. Fei-Fei Li, in an all-stock transaction valued at approximately $8.2 billion. The deal, announced September 28, 2026, is AMD's second-largest acquisition on record, trailing only its roughly $50 billion purchase of chipmaker Xilinx in 2022, and marks a direct move by AMD to bring frontier AI model research in-house as it competes with Nvidia for share of the AI buildout.

The deal

Under the agreement, Li — a Stanford computer scientist widely credited as an early architect of modern computer vision and often called the "godmother of AI" — will join AMD as executive vice president and chief scientist, reporting to chair and CEO Dr. Lisa Su. World Labs, which Li co-founded and had raised roughly $1 billion for prior to the acquisition, will operate inside AMD's model-research organization. The transaction is expected to close before the end of 2026, subject to regulatory approval.

What World Labs does

World Labs builds "world models" — deep learning systems designed to understand and simulate physical reality rather than just generate text or images. Its first product, Marble, generates and sustains high-fidelity 3D environments from text, image and video inputs, built for uses spanning entertainment production to training robots in simulation before they act in the physical world. Su said in a statement that combining "World Labs' deep expertise in AI and world models with AMD's compute leadership" would help power the next phase of AI. Li said the effort "requires scaling our efforts, widening our reach, and getting closer to the hardware," adding that "without having a focused hardware effort, AI is hobbled in efficiency. And scale."

Why AMD is buying model research, not just chips

The acquisition is a bet that owning research talent behind physical and spatial AI models will sharpen AMD's own hardware and software roadmap as the industry's frontier shifts from chatbots toward robotics and agents that operate in the real world. AMD has spent 2026 racing to close the gap with Nvidia on the compute side: it launched its Instinct MI400 GPUs and Helios AI racks and signed a deal for Anthropic to run up to 2 gigawatts of AMD compute, a commitment that also included AMD taking an equity stake in Anthropic. It has watched rivals move the same way: Nvidia's entry into the PC chip market with RTX Spark sent AMD and Intel shares lower earlier this year, underscoring how directly Nvidia's moves have hit AMD's stock. Buying World Labs outright, rather than just running its models on AMD silicon, gives AMD a research arm that can shape what future workloads look like before the chips are designed for them — the same logic driving the broader capital race in AI, where valuations like Anthropic's $965 billion Series H have made frontier AI talent and research the scarcest resource in the industry, not compute alone.