AMD has agreed to acquire AI pioneer Fei-Fei Li’s start-up World Labs for $8.2bn in an all-stock transaction that will push the Nvidia competitor further beyond chips into cutting-edge model development. Li, the Stanford University researcher described as the “godmother of artificial intelligence”, founded the company in 2024 to work on so-called world models, AI systems that can understand and replicate 3D environments.

AMD’s chief executive Lisa Su said the deal would help the near-$1tn chip designer “shape its future technology road maps” by giving it insight into how the uses for AI are evolving. Both AMD and its chief rival Nvidia are expanding beyond semiconductors into AI model development. Nvidia earlier this month announced a $13bn deal to buy AI platform Hugging Face.

AMD’s deal for San Francisco-based World Labs, which it expects to close by the end of 2026 pending regulatory approval, gives it a foothold in world models, which have potential applications in industries such as robotics and gaming. Li, who is best known for founding ImageNet, will join AMD as executive vice-president and chief scientist.

AMD has made acquisitions over recent years as it looks to build its hardware and software ecosystem, including its $4.4bn acquisition of ZT Systems in 2025 and the $665mn acquisition of Finnish AI model company Silo AI in 2024.