AMD will acquire WorldLabs, a world model AI research company, in a deal valued at $8.2 billion. CNBC reported on Aug. 28 that AMD agreed to buy WorldLabs in an all-stock transaction.

WorldLabs is developing “world models” that simulate 3D environments. AMD plans to close the deal within this year.

The acquisition is AMD’s second-largest deal on record. AMD acquired Xilinx in 2022 for about $50 billion and participated as an investor in WorldLabs.

AMD aims to use WorldLabs’ next-generation model research to design in advance the performance it will need for AI chips in the coming years. AI researchers see world models as helpful for developing robots and other physical-based AI applications.

WorldLabs was founded by Fei-Fei Li (페이페이 리), a Stanford professor who previously led AI research at Google. Li will join AMD as chief scientist and senior vice president.

Li and AMD Chief Executive Lisa Su (리사 수) showed in a public demonstration earlier this year how WorldLabs’ model, called Marvel, creates 3D scenes from a few images. Li said at the time that intelligent agents such as robots, vehicles and tools can become safer if they learn in a digital world that reflects the laws of physics before being deployed in the real world.