The Zhitong Finance App learned that AMD (AMD.US) unexpectedly announced that it plans to acquire World Labs in a $8.2 billion all-stock deal. This move received positive feedback from Wall Street. Citibank analyst Atif Malik said that the inclusion of World Labs and its founder Li Feifei (known as the “Godmother of AI”) would give the company “deeper insight” into the direction of AI model evolution. AMD shares rose 1.2% before the market on Tuesday.
Recently, AMD, with an overall market value of over a trillion US dollars, suddenly announced on Monday EST that it will acquire World Labs, an AI startup founded by “AI godmother” Li Feifei, for 8.2 billion US dollars to incorporate one of the most core AI R&D forces in the field of world models and spatial intelligence into the integrated business layout of this chip supergiant.
In an interview with the media on Monday, AMD CEO Su Zifeng said, “The more we understand the whole process from end to end, the better we can create a better system.”
“This is why we bought World Labs,” said Su Zifeng. “We want to get world-class AI model development talents brought together by Li Feifei and fully combine them with AMD's capabilities in hardware, software, and systems.”
The acquisition was well received by many major Wall Street banks. In his report to clients, Malik wrote, “We think the motivations for this deal include: 1) attracting more top AI engineers (the company reports that the company has about 70 employees); 2) taking a better position in the physical AI field; and 3) building a better end-to-end system. We maintain AMD as the most promising growth computing semiconductor stock in 2026.” Malik gave AMD a “buy” rating, with a target price of $575.
RBC analyst Srini Pajjuri shared a similar view, believing that the acquisition of this private AI research lab could “help the company provide full-stack solutions to the robotics, simulation, and physical AI markets, which are still in their early stages.” Although AMD has included “world-class AI research teams and model experts” such as Li Feifei, Pajjuri believes that NVDA.US (NVDA.US) remains a “significant” leader in spatial AI and physical simulation with its Omniverse platform. Pajjuri gave AMD an “industry performance” rating, with a target price of $540.
Wells Fargo analyst Joe Quatrochi gave AMD an “plus” rating with a target price of $700, saying the core of the deal was to provide a better forward-looking vision. “We believe that inclusion in World Labs further expands AMD's open AI ecosystem — investors may compare it to Nvidia's OmniVerse, Cosmos, and Isaac ecosystems,” Quatrochi wrote in the report.