Advanced Micro Devices (AMD) to Acquire 'World Model' Startup World Labs for $8.2 Billion

[Financial News] Semiconductor company AMD has agreed to acquire World Labs, a startup founded by Stanford University professor and 'AI godmother' Fei-Fei Li, for $8.2 billion (approximately 11.12 trillion won).
On the 28th (local time), major foreign media outlets including the Financial Times (FT) and The Wall Street Journal (WSJ) reported that the all-stock acquisition is expected to significantly expand AMD's business beyond chip manufacturing into next-generation AI model development.
Founded in 2024, World Labs is a leader in the field of world models, which understand and generate three-dimensional (3D) environments. Trained on images, videos and text, world models are regarded as a next-generation core technology with applications across industries including robotics, gaming and the metaverse, extending beyond conventional ChatGPT-style large language models (LLMs).
In February, World Labs raised approximately $1 billion from companies including AMD and NVIDIA, bringing its estimated valuation to $5 billion (approximately 6.78 trillion won). Venture capital firm Andreessen Horowitz (a16z) also invested during the company's early days.
Regarding the acquisition of World Labs, AMD CEO Lisa Su emphasized, "It will play a decisive role in shaping AMD's future technology roadmap by providing insights into the direction of AI technology's evolution."
The transaction is expected to close by the end of 2026, subject to regulatory approval. Following completion of the acquisition, Professor Li will join AMD as chief scientist and executive vice president. "Close collaboration among model research, systems and computing resources is essential to advancing next-generation AI technologies," Li said. "By joining AMD, I will accelerate our research and help define the AI infrastructure of the future."
The competition for leadership in big tech's device and semiconductor sectors is consequently expanding from hardware to the broader software and model-infrastructure ecosystem. The deal represents AMD's direct response to its biggest rival, NVIDIA, which acquired AI platform Hugging Face for $13 billion earlier this month and strengthened its presence in the model sector by licensing technology from chip startup Groq for $20 billion in December.
Beyond this acquisition, AMD continues to pursue an aggressive expansion of its AI ecosystem. It acquired Finnish AI model company Silo AI for $665 million in 2024, followed by ZT Systems for $4.4 billion and specialized chip startup Taalas in 2025. AMD has also entered into semiconductor supply agreements and equity partnerships worth trillions of won with major AI companies including Meta Platforms, OpenAI and Anthropic.
As the AI industry is reshaped around robotics and next-generation chip architectures, industry attention is focused on whether AMD's efforts to build a big tech-centered ecosystem through its acquisition of World Labs will bring any changes to NVIDIA's dominant position.

[email protected] Yoon Jae-jun Reporter