Chipmaker AMD is acquiring World Labs, a two-year-old startup focused on physical AI that was founded by industry pioneer Fei-Fei Li. The $8.2 billion, all-stock deal will give AMD important technology in an emerging branch of AI that could power a new generation of autonomous machines such as robots and self-driving cars.
The acquisition will help AMD—which makes the GPU chips crucial for training and running AI models—design its products for the evolving applications of AI, and help it better compete with arch-rival Nvidia, which is also expanding into physical AI.
“Together, we’ll combine World Labs’ deep expertise in AI and world models with AMD’s compute leadership to power the future of AI and strengthen the open AI ecosystem,” AMD CEO Lisa Susaid in a post on X announcing the deal.
The deal brings together two of the leading women in the AI industry: AMD’s Suand World Labs’ Li, who is sometimes referred to as the “godmother of AI” for her work two decades ago creating ImageNet, a massive visual database that helped make deep learning possible. Li will become Executive VP and Chief Scientist at AMD, reporting to Su.
“Without having a focused hardware effort, AI is hobbled in efficiency. And scale. And for our purposes, remains trapped in the digital world,” Li said in a lengthy post on X about the move. She described AMD’s Su as a great friend and early investor in World Labs.
World Labs and AMD began a “deep technical partnership” last year focused on model training and inference optimizations on AMD’s GPU chips, Li said. “As our teams worked together, we realized what a natural fit it would be to bring together our AI ecosystem of software and hardware, foundation models and applications,” she said.
World models represent a different approach to creating intelligent software than the large language models being built by OpenAI, Anthropic, and Google. Unlike the text-based data that LLMs are trained on, world models are trained on data such as video that depicts the physical, three-dimensional world. The goal is to create AI that understands how objects move in the physical world—for instance, the way that a ball bounces—a capability that many industry insiders believe will be crucial to extending AI into objects like humanoid robots.
World Labs, which raised roughly $1 billion in funding, is one of several richly-funded startups betting on world models. Yann LeCun, Meta’s former chief AI scientist, launched AMI Labs in March. Nvidia has also built its own world models and partnered with startups such as Wayve that have built world models for self-driving cars.
“We built the company guided by the foundational belief that language alone isn’t sufficient for model development. The universe isn’t made up of words, it’s made of real things,” Li said in her post.
The companies said that World Labs’ team will join AMD as part of the deal, but did not provide specific figures for the number of employees. AMD said the dealis expected to close by the end of the year, subject to regulatory approvals.
Shares of AMD were roughly flat in after hours trading on Monday.
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