Chipmaker Advanced Micro Devices (AMD) is acquiring World Labs, a San Francisco-based artificial intelligence (A.I.) lab, for $8.2 billion U.S.
AMD had previously invested in World Labs and said that it’s paying for the startup company in an all-stock transaction.
World Labs was started by Fei-Fei Li, a Stanford professor who previously worked for Google parent company Alphabet (GOOGL) as their lead A.I. researcher.
Li will become AMD’s chief scientist and an executive vice president at AMD once the takeover is completed.
World Labs is developing a so-called “world model,” which can be used to simulate three-dimensional (3D) environments.
Researchers expect that world models will help develop robots and other physically grounded A.I. applications.
AMD said World Labs’ next-generation models will allow it to plan for what its microchips and processors need to be capable of in coming years.
The acquisition is the chipmaker’s second largest on record, following the $50 billion U.S. it paid for semiconductor firm Xilinx in 2022.
The World Labs purchase comes as AMD chases rival Nvidia (NVDA) in the market for A.I. microchips and semiconductors.
AMD stock has risen 277% over the last 12 months to trade at $607.87 U.S. per share.
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