AMD announced Monday that it will acquire World Labs, the AI startup founded by Dr. Fei-Fei Li, in an all-stock transaction valued at approximately $8.2 billion. Once the deal closes, Li will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su. The acquisition is expected to be finalized by the end of 2026, pending regulatory approval.
World Labs is based in San Francisco and focuses on spatial intelligence, building AI models that generate, reconstruct, and simulate interactive 3D environments from text, images, and video. The company launched its Atlas omni-world model on September 1, describing it as a model designed from scratch to understand text, images, video, and 3D within the same spatial framework. Atlas can support camera-controlled video generation, 3D scene reconstruction, and robotics simulations.
AMD and World Labs were already familiar partners before the acquisition. World Labs raised $1 billion earlier this year in a funding round that included AMD, and Li said the startup has been using AMD GPUs for model training and optimization. AMD views the deal as a way to move deeper into AI research and gain insight into how future AI models will shape chip, software, and system design, rather than remaining focused only on supplying processors.
The move strengthens AMD’s position against Nvidia, which according to Futurum Group controls more than 95% of the data-center GPU market, while AMD holds about 4.5%. Analyst Daniel Newman has suggested AMD could eventually reach 20-25% of the market. The acquisition also follows other AMD AI infrastructure moves, including reports that Microsoft intends to deploy AMD’s Helios rack-scale AI system and AMD’s plan to inject about $5 billion into the Anthropic project while supplying up to 2 GW of Instinct MI450 GPUs.
AMD is making the acquisition amid rapidly rising AI spending. Gartner forecasts worldwide AI spending will reach $2.7 trillion in 2026, up 49.5% year over year. IDC says AI infrastructure spending reached $89.7 billion in the first quarter and could hit $497 billion for the full year. PwC expects $31.6 trillion to be invested cumulatively in AI infrastructure by 2050, while TrendForce expects total 2026 capex from the nine leading cloud vendors to reach $886.7 billion.
