AMD Acquires 'Godmother of AI' for $8.2 Billion

▲ Photo: AI-generated image

AMD announced on the 28th (local time) that it would acquire Worldlabs, an AI startup led by Fei-Fei Li, in an all-stock transaction valued at $8.2 billion.

Li, a former Stanford University professor, is known for building the ImageNet database, which contributed to ushering in the era of deep learning. In the industry, she is known as the 'Mother of ImageNet' and the 'Godmother of AI'. Once the deal closes, Li will join AMD as Senior Vice President and Chief Scientific Officer, reporting directly to CEO Lisa Su.

Founded in 2024, Worldlabs has been researching 'world models' that transform text, images, and videos into interactive 3D spaces. Unlike existing large language models that primarily learn from text data, world models aim to understand the physical world by learning from video data that shows how objects actually move and collide.

Li has argued that this approach is essential for AI that needs to interact with the physical world, such as robots and autonomous vehicles. The company's first product, 'Marvel,' is a tool that creates 3D scenes from just a few images, introduced for entertainment production as well as for pre-training robots in virtual environments.

This acquisition is AMD's second-largest ever, following its acquisition of Xilinx for approximately $50 billion in 2022. AMD and Worldlabs have been collaborating on inference optimization and learning since last year, and Li also appeared on stage at AMD's CES presentation earlier this year. While AMD has only released text and video-based models so far, competitor Nvidia already has a family of world models called 'Cosmos.'

This acquisition is seen as a stepping stone for AMD to catch up with Nvidia in the robotics and physical AI domain. CEO Lisa Su stated, "By combining Worldlabs' deep tech with AMD's computing capabilities, we will strengthen the open AI ecosystem."

However, the market reaction was not immediately favorable. AMD's stock price temporarily dropped by nearly 4% during intraday trading after the acquisition announcement. This is attributed to the time it will take for an $8.2 billion bet to translate into actual revenue, and the uncertainty surrounding integration synergies, as AMD announced it would operate Worldlabs separately from its semiconductor business for the time being.