AMD is spending $8.2 billion to acquire World Labs, bringing one of the biggest names in artificial intelligence, Fei-Fei Li, into the chipmaker as it pushes deeper into the AI boom, Forbes reported.
AMD CEO Lisa Su announced the agreement late Monday to acquire World Labs, a San Francisco-based AI model company that focuses on software for 3D environments.
The deal is expected to close by the end of 2026. The acquisition gives Su not just an AI company but also a leading AI researcher who could play a bigger role at AMD as the company expands its AI business.
Fei-Fei Li joins AMD as chief scientist
World Labs was founded in 2024 and is led by Dr Fei-Fei Li, a well-known AI researcher who is often referred to in the technology industry as the “Godmother of AI”.
Li previously served as chief scientist at Google Cloud. According to Forbes, Li will join AMD as executive vice president and chief scientist. She will report directly to Su.
According to Forbes, Li will also get a chance to work more closely on the business side of AI. Her role at AMD will include working with Su on major deals and giving her greater exposure to Wall Street as AMD continues to expand its presence in the AI market.
Su has been praised in the technology industry for her leadership at AMD and has also struck major AI deals, including an agreement with Meta earlier this year.
AMD shares rose slightly in after-hours trading after the announcement. The stock had closed at $607.87, down 3.61%, on Monday.
AMD is buying AI talent and know-how
The World Labs deal is not primarily about adding immediate revenue to AMD. Instead, the company is gaining AI researchers and expertise that could help shape the chips and systems it develops for the future.
“This is a talent and model-insight buy, not a revenue play. AMD gets the people building the models its future chips will have to run,” tech analyst Patrick Moorhead said according to Forbes.
Moorhead also pointed to a comment from Li about the need for stronger links between AI software and hardware.
“Without having a focused hardware effort, AI is hobbled in efficiency,” Li said.
World Labs focuses on AI models that work with 3D environments. Its technology is aimed at helping AI systems understand, reconstruct and simulate the physical world.
That expertise could be useful to AMD as the chipmaker looks beyond traditional AI workloads and into areas such as physical AI.
Deal could strengthen AMD against Nvidia
World Labs develops AI models focused on spatial intelligence. Its technology can reconstruct and simulate 3D environments using text, images and video as inputs. This could help AMD address an area where its main rival, Nvidia, has had an advantage. Nvidia already offers tools that support 3D AI training.
Citigroup analyst Atif Malik said bringing Li and her team into AMD could give the company a better understanding of how AI models are changing.
“By adding Dr. Fei-Fei Li and her team, AMD gains deeper visibility into how AI models are evolving, which strengthens its competitive position against NVIDIA and accelerates its broader AI platform ambitions,” Malik wrote.
He said the deal could have several goals, including bringing more leading AI engineers to AMD, strengthening its position in physical AI and helping the company build more complete AI systems.
“We believe the motivations for this transaction include: 1) acquiring more leading AI engineers; 2) better position the company within physical AI, and 3) build better end-to-end systems,” Malik wrote.
Malik also said Citigroup continues to view AMD as its “favourite growth compute semis pick in 2026.
AMD rides AI demand
The company has benefited from the wider boom in AI, with businesses increasingly using AI systems in their operations. AMD reported $11.5 billion in revenue and $2.3 billion in net income in the second quarter of 2026.
Its data centre business was a major part of that growth. Data centre revenue more than doubled from a year earlier to $6.7 billion, accounting for more than half of AMD’s total revenue.
AMD also reported $808 million in capital expenditure during the second quarter.
Lisa Su’s bigger AI bet
The $8.2 billion World Labs acquisition adds to Su’s push to make AMD a bigger player in the fast-growing AI infrastructure market.
While the deal does not immediately add a large revenue stream, AMD is gaining a team working directly on AI models and a researcher with deep experience in the field.
For AMD, the bigger question now will be how it uses Li and the World Labs team to connect AI models with the hardware and systems that power them.