AMD has agreed to acquire AI startup World Labs in an $8.2 billion all-stock transaction, bringing founder Fei-Fei Li to the chipmaker as Executive Vice President and Chief Scientist, reporting to Lisa Su. World Labs' team will join AMD, which expects the deal to close by year-end subject to regulatory approvals. The acquisition gives AMD technology for physical AI, including world models trained on visual and three-dimensional data to help software understand how objects and environments behave in the real world. AMD and World Labs began a technical partnership last year focused on model-training and inference optimization for AMD GPUs. The deal is intended to help AMD align its computing products with emerging AI applications such as robotics and autonomous vehicles as it competes with Nvidia, which is also investing in world-model technology. World Labs has raised roughly $1 billion and is among several well-funded companies pursuing AI models beyond language-focused systems.