AMD spends $8.2bn on Fei-Fei Li's World Labs to chase Nvidia into robotics

AMD is paying $8.2 billion in stock for World Labs, the spatial-intelligence lab founded by Fei-Fei Li, in a deal that pulls the chipmaker directly into the fight over who controls the next layer of AI: models that understand and simulate the physical world rather than just text.

The acquisition, announced on 28 September 2026, is AMD's second-largest ever, trailing only its roughly $50 billion purchase of Xilinx in 2022, according to CNBC. AMD was already an investor in World Labs before agreeing to buy it outright. The deal is expected to close by the end of 2026, subject to regulatory approval.

World Labs builds models that generate, reconstruct and simulate interactive 3D environments from text, images and video, alongside technology for robot learning and simulation. Its flagship product, Marble, turns a handful of images into 3D worlds, and is already used both for entertainment and for the simulated environments needed to train robots. On closing, Li becomes AMD's executive vice president and chief scientist, reporting to chair and chief executive Lisa Su, while her team continues its model research inside AMD.

The move is a direct answer to Nvidia, which already ships open world models such as Cosmos and has built a commanding lead in AI hardware. AMD and Nvidia began a training and inference-optimisation partnership on AMD GPUs last year, but this deal signals AMD wants model research embedded in its own chip and software roadmap rather than relying on partnerships alone. Su said building compute platforms for the next generation of AI requires a deep understanding of how models are evolving, according to TechCrunch. Li, the Stanford professor who created ImageNet, has long argued that general intelligence needs grounding in physics rather than text alone. "To do this requires scaling our efforts, widening our reach, and getting closer to the hardware," she said.

The stock-funded structure matters as much as the price tag: AMD is using its own equity rather than cash to buy scientific talent and a roadmap position, betting its shares hold value through the deal's close rather than diluting its balance sheet with debt. For AMD, the prize isn't Marble's current commercial traction but the leverage to co-design hardware around spatial and robotics workloads before Nvidia locks up that market the way it has locked up training.

The risk sits with execution. AMD has never run a research lab of this profile, and folding World Labs' model work into a hardware-first culture, while keeping Li productive as chief scientist rather than a figurehead, is the harder part of the bet than writing the cheque. Rivals building robotics and simulation models on Nvidia's Cosmos platform will be watching whether AMD can turn this into differentiated silicon, or just an expensive credibility purchase.