In spending $8.2 billion to scoop up World Labs, AMD (AMD) CEO Lisa Su has gained an AI innovator and possible successor for when the time comes.

AMD announced late this afternoon an agreement to acquire World Labs, an AI model lab based in San Francisco that focuses on software for 3D environments.

The transaction is expected to close by the end of 2026.

World Labs was founded in 2024 and is led by Dr. Fei-Fei Li, a leading AI researcher known in tech circles as the "Godmother of AI." She was once the chief scientist at Google (GOOG) Cloud.

AMD CEO Lisa Su (left) and World Labs' Fei-Fei Li (right). · Fei-Fei Li Substack post.

Li will join AMD as an executive vice president and chief scientist. The direct reporting line to Su underscores the pivotal role Li will play in shaping AMD amid the unprecedented AI boom.

At the same time, Li will add new operational layers to her resume by working closely with one of the most well-regarded CEOs in tech, including a greater presence on Wall Street and executing big deals like the one Su struck with Meta (META) this year.

AMD shares rose 0.7% during premarket trading on Tuesday.

"This is a talent and model-insight buy, not a revenue play. AMD gets the people building the models its future chips will have to run. Fei-Fei made the case from her side: 'Without having a focused hardware effort, AI is hobbled in efficiency,'" tech analyst Patrick Moorhead said.

Citigroup analyst Atif Malik also shared an initial reaction to AMD's latest bout of dealmaking.

More from Yahoo Scout Who is Fei-Fei Li and what role will she play? How does this acquisition help AMD compete with NVIDIA? Why did AMD acquire World Labs for $8.2 billion? What are the expected timeline and strategic benefits for AMD?

"By adding Dr. Fei-Fei Li and her team, AMD gains deeper visibility into how AI models are evolving, which strengthens its competitive position against NVIDIA and accelerates its broader AI platform ambitions," Malik wrote. "We believe the motivations for this transaction include: 1) acquiring more leading AI engineers; 2) better position the company within physical AI, and 3) build better end-to-end systems. We maintain AMD as our favorite growth compute semis pick in 2026."

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show, the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.

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