AMD to acquire World Labs for 8.2 billion dollars in all-stock deal

AMD has signed a definitive agreement to acquire World Labs Technologies, Inc. for approximately 8.2 billion dollars, with the transaction to be settled entirely in AMD common stock. The deal is expected to close by the end of 2026, subject to regulatory approval and other customary closing conditions. The agreement was signed on September 26 and publicly announced on September 28, 2026.

The acquisition price is based on the volume-weighted average price of AMD shares over the ten trading days preceding the closing date. The exact number of shares to be issued has not yet been determined and will be calculated at the time of closing. AMD stated that the shares will be issued under exemptions from U.S. securities laws and will not constitute a public offering.

Upon completion of the transaction, World Labs will continue its research into artificial intelligence models. Fei-Fei Li, the company's co-founder and chief executive officer, will assume the role of executive vice president and chief scientist at AMD, reporting directly to AMD's chief executive officer. Co-founders Justin Johnson and Ben Mildenhall will also remain with the team to lead ongoing research efforts.

World Labs was established in 2024 with a focus on spatial intelligence, aiming to develop models that understand spatial structures and can generate, reconstruct, and simulate three-dimensional worlds. The company's research extends to image and video processing, three-dimensional reconstruction, and robotics simulation, the latter achieved through its acquisition of SceniX. The company recently released a model named Atlas, which predicts scene views from new angles based on two-dimensional images and combines generative models with multi-view geometry for three-dimensional reconstruction.

Fei-Fei Li cited the desire to scale research and bring model development closer to hardware as primary reasons for joining AMD. She noted that without targeted hardware investment, world models face limitations in efficiency and scale. AMD and World Labs have collaborated for the past year on optimizing model training and inference on AMD graphics processing units. AMD's venture capital arm was an early investor in World Labs, which also received funding from other companies in February of this year.

AMD stated that the acquisition will allow it to better understand computational bottlenecks in training and running advanced models, informing its hardware, software, and system roadmaps. The company believes that artificial intelligence applications are expanding into inference, robotics, simulation, and physical AI, creating diverse computing demands. This move extends AMD's competitive efforts against Nvidia into the domain of world models, where Nvidia already offers a suite of tools for physical AI development.

Reactions to the announcement have been mixed. Some industry figures expressed congratulations, while others questioned the valuation of a company with approximately 150 employees. Commentators also raised questions about how AMD will integrate World Labs' research into its product ecosystem and whether the models will remain compatible with platforms from other vendors. The long-term impact of the acquisition on AMD's software and hardware systems remains to be seen.