Technology and Science29 September, 20262 min read
AMD Agrees To Acquire World Labs For $8.2 Billion, Pending Regulatory Approval
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All-stock deal valued at $8.2 billion to acquire World Labs. Fei-Fei Li will become AMD's Chief Scientist and Executive Vice President.
AMD buys World Labs
AMD agreed to acquire World Labs, with the deal valued at $8.2 billion and described as pending regulatory approval, and AMD said it would finance the transaction through a share issue. World Labs was founded in 2024 by Fei-Fei Li along with Justin Johnson, Christoph Lassner, and Ben Mildenhall, and the company began working on world models aimed at providing a useful, predictive simulation of the physical world. World Labs built Marble as its first publicly usable tool, and Marble can generate small 3D spaces using Gaussian splats that can be exported as 3D assets for film production and game development.
AMD and World Labs also developed additional models and tools, including Atlas, and the sources tied the push for physical AI to generating synthetic data for training robots. AMD positioned the acquisition as a way to close the gap with Nvidia in the data center processor market, while the sources contrasted AMD’s prior Micro-World open-source world model with Nvidia’s Cosmos and related models.
Li and Su set direction
Lisa Su said, "Building computing platforms for the next generation of AI requires a deep understanding of how models evolve," as AMD framed the acquisition around the evolution of AI models. Fei-Fei Li said, "Advancing the next generation of AI technology requires close collaboration between model research, systems, and computing," and she added that joining AMD would give her team resources and engineering depth. World Labs described its specialty as spatial intelligence models that generate, reconstruct, and simulate interactive 3D environments from text, images, and videos, alongside technology for robotic learning and simulation.
World Labs also said it had already begun a close collaboration with AMD since last year, focused on optimizing training and inference of models on AMD GPUs. The sources said the transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions, and they said World Labs would continue focusing on model research after the transaction closes.
Competition in physical AI
Analysts cited in the sources said the acquisition could help AMD build end-to-end solutions for robotics, simulation, and physics-based AI markets, which they described as in early stages. Rosenblatt maintained a Buy rating and a $700 price target for AMD after the acquisition, and the source said Rosenblatt argued that World Labs engineers could accelerate AMD’s development of system-level AI platforms. Citi analyst Atif Malik said bringing World Labs and Li onboard could give AMD deeper visibility into how AI models evolve, and the source described Malik’s Buy rating and $575 price target.
The sources also reported that Nvidia maintains a significant lead in space AI and physics-based simulation through its Omniverse platform, and they said Nvidia offers Cosmos as a foundational model for world representation. AMD’s deal was also framed as its second-largest acquisition, behind a roughly $50 billion purchase of Xilinx in 2022, and the sources said World Labs would remain separate from AMD’s chip-manufacturing business until the transaction closes later this year.