Chipmaker AMD has agreed to acquire World Labs, the AI startup founded by Fei-Fei Li, in an all-stock deal valued at $8.2 billion. The agreement is one of the largest AI acquisitions of the year and is expected to close by the end of 2026.

As part of the deal, Li will join AMD as executive vice president and chief scientist. The appointment places one of the most prominent researchers in artificial intelligence at the centre of AMD’s AI strategy.

World Labs has focused on building AI systems that understand and generate three-dimensional environments. AMD said the acquisition strengthens its push to challenge rivals in AI computing, where demand for powerful chips and software continues to grow.

The move comes as chipmakers race to control more of the AI stack, from hardware to the models that run on it. Acquiring an AI lab outright gives AMD research talent and technology in one step.

Regulatory review and shareholder approval remain the next milestones before the deal can close. Analysts will be watching how quickly the combined teams deliver new products.