SAN FRANCISCO — AMD agreed to acquire AI startup World Labs for $8.2 billion in an all-stock transaction, appointing founder Fei-Fei Li as executive vice president and chief scientist. The deal is expected to close before the end of 2026, subject to regulatory approval. "Now that we have tangible proof of the possibilities, we want to do everything we can to accelerate the future," Fei-Fei Li said. "To do this requires scaling our efforts, widening our reach, and getting closer to the hardware," she said.

Li will report to AMD CEO Lisa Su, and the entire World Labs team will join the chipmaker. Shares of AMD were roughly flat in after-hours trading on September 28, 2026.

The acquisition builds on a series of collaborations between the two entities. In 2025, AMD and World Labs formed an inference optimization-and-training partnership. Li also appeared as a guest speaker at AMD’s CES 2026 keynote address earlier this year.

"Building the compute platforms for the next generation of AI requires a deep understanding of how models are evolving," Su said. "Fei-Fei and the World Labs team bring exceptional research leadership and model expertise."

Su added that the combination would leverage World Labs' capabilities alongside AMD's hardware. "Together, we can use that insight to develop the hardware, software and systems that will power the next generation of AI and strengthen the open AI ecosystem," she said.

Li emphasized the necessity of integrating software development with hardware infrastructure. "Without having a focused hardware effort, AI is hobbled in efficiency. And scale. And for our purposes, remains trapped in the digital world," she said.

World Labs noted that its approach relies on tight integration between different technical domains. The company stated that AI development requires "close collaboration across model research, systems and compute." AMD similarly indicated that understanding frontier workloads will shape its chip-making roadmap.

Li founded World Labs in 2024 alongside co-founders Justin Johnson, Christoph Lassner, and Ben Mildenhall. The San Francisco-based startup raised $230 million in initial funding that year, with AMD among the early investors. She planned to continue some of her work at Stanford while building the company.

World Labs raised roughly $1 billion in total funding, including an additional round in February 2026 led by chip companies such as AMD and Nvidia. The company launched its first product, Marble, in 2025. Marble is a tool for creating simulated environments for robot training and entertainment experiences, capable of generating small 3D spaces using Gaussian splats.

The startup also introduced Atlas, a spatial intelligence model released in 2025 that outperformed state-of-the-art results in sparse reconstruction tasks. Li, a Stanford computer science professor who previously worked for Google, built the ImageNet database earlier in her career.

Why It Matters

The $8.2 billion all-stock acquisition represents a consolidation of AI model research and semiconductor manufacturing. By bringing World Labs’ team and technology in-house, AMD aims to align its chip-making roadmap directly with the requirements of frontier AI workloads. This move follows a pattern of vertical integration in the AI sector, where hardware manufacturers seek closer ties with model developers to optimize performance and efficiency.

The deal strengthens AMD’s position in the open AI ecosystem by combining its compute leadership with World Labs’ expertise in world models and spatial intelligence. Li’s appointment as executive vice president and chief scientist places a prominent AI researcher in a key leadership role at AMD, reporting directly to CEO Lisa Su. The transaction, expected to close before the end of 2026, signals a strategic shift toward developing hardware and software as a unified stack.

Timeline

In 2024, Fei-Fei Li founded World Labs alongside co-founders Justin Johnson, Christoph Lassner, and Ben Mildenhall. The company raised $230 million in initial funding that same year, with some capital coming from AMD. In 2025, World Labs launched its first product, Marble, and formed an inference optimization-and-training partnership with AMD.

Li appeared as a guest at AMD’s CES presentation in 2026. On September 28, 2026, she stated, "Just like I knew it was time to do a startup to jumpstart the work of creating foundation models beyond LLMs and achieve the most impact in AI, it’s again very clear that the right path for myself and World Labs is to continue our mission as a part of AMD."

What's New

Additional reporting provided further detail on the strategic rationale and future commitments of the deal. She said the team is committed to pushing the frontier of AI to solve real problems openly with the community and the entire ecosystem. Su said the combination would strengthen the open AI ecosystem. She said the belief guiding the company was that language alone isn’t sufficient for model development because the universe isn’t made up of words, but of real things. Additionally, it was disclosed that Li will continue some of her work at Stanford while building World Labs.