AMD is paying about $8.2 billion in stock for World Labs, a two-year-old startup run by Fei-Fei Li. Her ImageNet photo database helped launch the modern AI boom.
This startup was actually funded by Nvidia – partially. This now puts Nvidia in a very odd spot.
AMD Buys the Brains to Go With Its Chips
World Labs is basically trying to teach AI to understand and create 3D spaces, rather than only understanding words or flat images.
For instance, ChatGPT can understand: “There is a chair next to a table.”
World Labs wants AI to understand what that room actually looks like in 3D — where the chair is, how far it is from the table, what you would see if you walked behind it, and potentially what happens when objects move or interact. They call this “spatial intelligence.”
With this latest partnership, Li becomes AMD’s chief scientist, reporting straight to the company’s Chair and CEO.
Li explained on Substack why her lab needed a chipmaker like AMD.
“Without having a focused hardware effort, AI is hobbled in efficiency. And scale. And for our purposes, remains trapped in the digital world,” she wrote.
What the World Labs Deal Means for Nvidia
Nvidia won’t like the fact that its biggest competitors are now partnering with a company it helped fund. But Nvidia itself has an edge in open-world models for AI.
The company’s physical AI model, Cosmos, already helps Samsung, LG, and others build robots.
Nvidia invested in World Labs in February, right alongside AMD. The lab was valued at about $5 billion then, according to SiliconANGLE. AMD is now paying roughly 64% more.
So Nvidia loses the lab to its rival, but SiliconANGLE said it is set for a big return. Because AMD pays in stock, World Labs’ backers, Nvidia included, stand to receive AMD shares. Nvidia has not disclosed the size of its stake.
The purchase comes one week after AMD topped $1 trillion in market value for the first time, effectively becoming the fourth US chipmaker valued above that mark, after Nvidia, Broadcom and Micron.
A Top AI Scientist Calls the Sale Acquihire Bait
Not everyone is cheering. Pedro Domingos, a University of Washington computer science professor emeritus, mocked the sale.
“If you start a neolab with the declared goal of solving AI and quickly get acquired for a few billion, you weren’t serious to begin with. Maybe for truth in advertising you should have called it Acquihire Bait,” he said.
An acquihire is a deal made mostly to hire a startup’s people.
Li says the lab’s mission continues. Her co-founders Justin Johnson and Ben Mildenhall stay with the team inside AMD. Regulators still need to approve the deal, which should close by year’s end.
