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Advanced Micro Devices (AMD) has entered into a definitive agreement to acquire World Labs, an artificial intelligence research lab led by AI pioneer Dr. Fei-Fei Li, in a deal valued at approximately $8.2 billion.
The transaction will be entirely stock-based and is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions.
The acquisition represents a significant expansion of AMD's AI strategy. Rather than focusing only on the chips that power conventional AI workloads, AMD is gaining access to research focused on how artificial intelligence can understand, simulate and reason about three-dimensional environments and the physical world.
Following completion of the deal, Fei-Fei Li will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su.
Li is widely recognized for her contributions to computer vision and AI research, including her work on ImageNet, a large-scale visual dataset that played an important role in the development of modern deep learning.
Her World Labs research has focused on spatial intelligence, an emerging area of AI aimed at enabling machines to understand relationships between objects, environments and physical interactions.
Unlike AI systems primarily designed to process language, spatial-intelligence models are designed to understand the structure and behavior of the physical world.
World Labs develops models capable of generating, reconstructing and simulating interactive 3D environments using inputs such as text, images and video. Its technology is also being developed for robotic learning and simulation.
The technology could eventually support applications including:
The broader objective is to help AI systems move from understanding digital information to reasoning about what can happen in the real world.
The acquisition builds on an existing relationship between the two companies.
According to Reuters, World Labs and AMD began a technical partnership in 2025 focused on AI model training and inference optimization using AMD GPUs.
World Labs also raised $1 billion in funding earlier in 2026, with AMD among the investors.
Fei-Fei Li said the partnership allowed the teams to recognize the potential of combining World Labs' AI research with AMD's hardware and systems capabilities.
AMD says that AI is expanding into areas such as reasoning, robotics, simulation and physical AI, creating new requirements for computing infrastructure.
For AMD, understanding how these emerging AI models operate could help influence the company's future hardware, software and system designs.
The company said World Labs' research will provide deeper insight into emerging AI workloads and help guide its technology roadmaps across hardware, software and systems.
This approach reflects a broader shift in the AI industry. Chipmakers are increasingly looking beyond processors themselves and toward the models and applications that will determine what future AI computing infrastructure needs to deliver.
The acquisition comes only months after World Labs raised $1 billion in a funding round.
The funding included investments from major technology and financial organizations, including AMD and NVIDIA. At the time, the company was accelerating development of its spatial-intelligence technology and world models.
World Labs was founded in 2024, making the $8.2 billion proposed acquisition a major transaction for a relatively young AI company.
AMD has been expanding its presence across the AI computing market through its EPYC processors, Instinct GPUs, networking technologies and AI software ecosystem.
The World Labs acquisition adds another layer to that strategy by bringing AI model research directly into AMD's technology organization.
The company says the combination can help it develop computing platforms around the requirements of emerging AI models rather than designing hardware independently of how those models evolve.
The move also comes as AI development increasingly expands beyond large language models toward multimodal AI, autonomous agents, robotics and physical AI.
AMD and World Labs expect the transaction to close before the end of 2026, but the acquisition is not yet complete.
The $8.2 billion transaction remains subject to regulatory approval and other customary closing conditions. Until those conditions are satisfied, World Labs remains a separate company.
Once completed, World Labs' research team will continue working on AI model development, while Fei-Fei Li will take on her new leadership role at AMD.
The acquisition places AMD at the intersection of AI chips, foundation models, spatial intelligence and physical AI, as the industry explores what comes after today's chatbot-focused generation of artificial intelligence.
