AMD acquires ‘godmother of AI’ Li Fei-Fei’s start-up as battle with Nvidia intensifies

US chip giant Advanced Micro Devices (AMD) has agreed to acquire World Labs, the artificial intelligence start-up founded by renowned Chinese-American computer scientist Li Fei-Fei, for US$8.2 billion in an all-stock deal, as the company steps up its rivalry with Nvidia.

The acquisition, expected to close by the end of this year, would integrate World Labs’ research team and spatial-intelligence model expertise into AMD, according to an announcement on Monday.

Li, a Stanford University professor widely known as the “godmother of AI” for creating the groundbreaking ImageNet database, would join AMD as executive vice-president and chief scientist, reporting directly to CEO Lisa Su, the announcement said.

Founded in 2024, World Labs specialises in spatial intelligence, developing so-called world models that can perceive, generate and reconstruct 3D environments. The technology is considered increasingly important for robotics and physical AI, where models must interact with the real world rather than simply process text.

Earlier this month, the start-up unveiled Atlas, its latest model capable of processing text, images, video and 3D data to generate new views of a scene based on spatial relationships.

The US$8.2 billion deal exceeds the roughly US$5 billion valuation World Labs was seeking in a funding round earlier this year, according to a Bloomberg report in January.

AMD was an investor in the start-up’s Series B round, and the two companies formed a partnership last year to optimise model training and inference on AMD graphics processing units.

“Without having a focused hardware effort, AI is hobbled in efficiency. And scale,” Li wrote in a Substack post announcing the deal.

“As our teams worked together, we realised what a natural fit it would be to bring together our AI ecosystem of software and hardware, foundation models and applications.”

Su said on AMD’s website that the acquisition would help the company “develop the hardware, software and systems” that would “power the next generation of AI and strengthen the open AI ecosystem”.

The deal is widely viewed as a challenge to Nvidia, which has developed its Cosmos family of world models and this month agreed to acquire open-source AI platform Hugging Face for US$12.93 billion.

Hugging Face serves as a hub for the open-source AI ecosystem, used by more than 18 million developers, researchers and creators, and hosting more than 3 million models.

The acquisition gave Nvidia a direct foothold in the software and developer layer of the AI industry, potentially creating a pipeline of customers for its computing hardware as major clients including OpenAI, Meta Platforms and Microsoft develop their own chips.

In a sign of the increasingly competitive nature of the sector, AMD was an investor in Hugging Face before Nvidia bought it, while Nvidia participated in World Labs’ US$1 billion funding round in February, according to the companies’ websites.