AMD has agreed to acquire World Labs, the spatial AI company co-founded by Fei-Fei Li, in an all-stock deal valued at about $8.2 billion. The acquisition is intended to help guide AMD’s future AI hardware and software as the company competes with Nvidia, whose strength includes both powerful chips and the tools that make them easier for businesses to use.

Founded in 2024, World Labs develops “world models” that generate and simulate 3D environments from text, images and video, aiming to reason about physical settings rather than mainly predict sequences of words. The company will continue its research within AMD, and Li will become an executive vice president and chief scientist reporting to chief executive Lisa Su; the deal is expected to close by the end of the year, subject to regulatory approval. The article presents the purchase as both a way to build AMD’s AI development expertise and a bet that spatial models will be important alongside large language models.