This article first appeared on GuruFocus.
Investors familiar with the matter say artificial intelligence researcher Fei-Fei Li has been holding discussions to raise hundreds of millions of dollars for her startup, World Labs, in a financing that could value the company at around $5 billion. The talks, which have not yet been finalized and could still change, would represent a significant step up from the company’s emergence from stealth in 2024, when it raised $230 million at a $1 billion valuation. People close to the process indicated the round could add roughly $500 million to World Labs’ balance sheet, though representatives for the company have not commented publicly.
World Labs is focused on developing what it calls large world models, AI systems designed to reason about and operate within three-dimensional environments rather than text alone. Late last year, the company launched its first product, Marble, which it describes as a model capable of generating 3D worlds from image or text prompts. This direction appears to align with a broader shift among AI investors, who are increasingly looking beyond large language models toward emerging areas such as world models that are still in earlier stages of development but could represent a new frontier for the industry.
The company’s investor base includes Andreessen Horowitz, NEA, Radical Ventures, and Nvidia Corp. (NASDAQ:NVDA)’s venture arm, alongside backers such as Saudi Arabia’s Sanabil Investments and Singapore state investor Temasek Holdings. Individual participants in World Labs’ 2024 funding round included Google (NASDAQ:GOOG) DeepMind chief scientist Jeff Dean, actor and investor Ashton Kutcher, and Geoffrey Hinton, a former Google AI researcher. The fundraising discussions come as interest in world models accelerates across the sector, highlighted by reports that Yann LeCun’s AMI Labs is also attracting potential backers in a round that could value that company at $3.5 billion.