Advanced Micro Devices has agreed to acquire artificial intelligence startup World Labs for $8.2 billion, adding a team of prominent AI researchers and its technology to the chipmaker’s expanding portfolio.
The all-stock transaction is expected to close by the end of the year, subject to regulatory approval, the companies said on Monday. World Labs was founded in 2024 by Fei-Fei Li, a leading AI researcher and computer scientist at Stanford University.
Li, who has served as World Labs’ chief executive, will join AMD as executive vice-president and chief scientist under the agreement. She will report directly to AMD CEO Lisa Su.
Su said the acquisition would give AMD access to World Labs’ research expertise and help the chipmaker better connect its hardware, software and systems development.
“The more you understand end to end, the better system you are going to build,” Su said. She said World Labs’ researchers would bring expertise that could help AMD understand how AI is developing and incorporate that knowledge into future hardware.
World Labs specialises in so-called world models, AI systems designed to understand and generate representations of physical environments. Its technology can generate and reconstruct three-dimensional environments and is intended for applications including robotics, scientific research and industrial equipment.
Li said the startup’s expanding ambitions had also increased its need for computing resources. She said joining AMD could accelerate development between AI software and the hardware required to run it.
The acquisition will also allow AMD to expand the range of AI models and related services it offers customers. The company has been broadening its portfolio as it seeks to capture more spending from data-centre operators, its largest source of revenue.
Su said AMD intends to support both open and proprietary AI models as it develops a wider set of products and services for customers building and operating AI data centres.
The strategy follows a broader shift among chipmakers towards providing more than computing hardware. Nvidia, AMD’s much larger rival in AI accelerators, has pioneered the combination of chips, software, equipment and services designed to help customers deploy AI systems rapidly.
Nvidia has also been expanding through acquisitions. It recently agreed to acquire AI startup Hugging Face in a transaction valued at about $13 billion.
World Labs has about 70 employees, including robotics specialists who joined after the company acquired SceniX in July. SceniX develops software designed to train robots in realistic virtual environments.
The acquisition marks another step in AMD’s effort to strengthen its position in artificial intelligence. During Su’s 12 years leading the company, AMD has expanded its technical presence in the semiconductor industry and challenged Intel in processors, where it has developed products that have received strong industry evaluations.
AI accelerators remain a different challenge. AMD is still well behind Nvidia in the market for chips used to train and run AI models, although Su has introduced newer products that she says can outperform Nvidia’s competing offerings in some applications.
Investors have increasingly valued AMD as a beneficiary of rising AI infrastructure spending. The company’s shares have nearly tripled this year, giving AMD a market valuation of roughly $1 trillion.
Nvidia remains the world’s most valuable company, with a market capitalisation above $5 trillion. Its shares have risen about 22% this year, however, compared with the much larger increase in AMD’s stock.
The World Labs acquisition will therefore give AMD access not only to additional AI technology but also to a specialised research team working on models that connect artificial intelligence with physical environments, as the chipmaker seeks to expand its role in the broader AI computing industry.
