Leading semiconductor company AMD announced plans to acquire World Labs for $8.2 billion. World Labs builds AI models that generate 3D physical environments. The acquisition could expand AMD’s capabilities in physical AI by combining AMD’s GPU hardware with World Labs’ spatial intelligence technology. The transaction is also notable as a rare AI deal bringing together two prominent women in the AI industry.

Based in San Francisco, World Labs was founded by acclaimed computer scientist Fei-Fei Li. Known as the “godmother of AI”, Fei-Fei Li developed ImageNet, a large visual database that has played a key role in advancing AI object recognition and image classification. She has also served as a professor at Stanford University, where she was the founding director of Stanford’s Human-Centered AI Institute. World Labs was founded in 2024. Following the closing of the acquisition, Fe-Fei Li will become Executive Vice President and Chief Scientist at AMD.

World Labs is described as a spatial intelligence company that can generate, simulate, and reconstruct interactive 3D worlds. The company’s first product, called Marble, allows users to generate editable 3D environments from texts, photos, and videos. World Labs has been training its AI models on AMD’s GPUs since last year. Through this technical partnership, which also involved inference optimization on AMD’s GPUs, the teams realized the natural synergies between the two companies.

Led by CEO Lisa Su, AMD produces a broad portfolio of AI-optimized Central Processing Units (CPUs), Graphics Processing Units (GPUs), and software. Lisa Su became CEO of AMD in 2014 at a time when the company was struggling after years of underperformance. Today, AMD has a market capitalization of over $1 trillion. AMD has three reportable segments: the Data Center segment, the Client and Gaming segment, and the Embedded segment. Accelerating the growth of the company’s Data Center segment has been a particularly important business priority recently.

“Fei-Fei and the World Labs team bring exceptional research leadership and model expertise,” stated AMD’s CEO Lisa Su. “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.”

While NVIDIA is currently the market leader in AI and graphics hardware, AMD has established itself as a formidable rival. Both AMD and rival NVIDIA invested in World Labs $1 billion fundraising round in February 2026. Jensen Huang, the CEO of NVIDIA, is Lisa Su’s first cousin. Other investors in the funding round included Fidelity, Autodesk, and Emerson Collective. NVIDIA has also been making strategic acquisitions of AI startups, such as the announcement of NVIDIA’s plan to acquire AI startup Hugging Face for $13 billion.

The $8.2 billion acquisition is an all-stock transaction, whereby shareholders of World Labs will receive shares of AMD’s common stock. The number of shares will be calculated based on the daily volume-weighted average price (VWAP) of a share of AMD’s common stock over a 10-day period preceding the closing date. The deal is expected to close by the end of 2026.