Li was born in Beijing in 1976 and grew up in Chengdu. At 16 she moved with her mother to Parsippany, New Jersey, where her father had emigrated, and worked weekends in the family's dry-cleaning shop. She took a physics degree at Princeton in 1999, going home most weekends to help run the shop, then a master's and, in 2005, a PhD in electrical engineering at Caltech under Pietro Perona and Christof Koch.
After teaching at the University of Illinois Urbana-Champaign and Princeton, she began ImageNet at Princeton in 2007: more than 14 million images labeled across 22,000 categories by workers on Amazon Mechanical Turk. Its annual recognition challenge drove the jump in image classification that set off the deep learning boom. She joined Stanford in 2009, became a full professor in 2018, directed the Stanford AI Lab from 2013 to 2018 and became founding co-director of the Stanford Institute for Human-Centered AI.
On sabbatical from January 2017 to fall 2018 she was chief scientist of AI/ML and a vice president at Google Cloud. Her leaked internal emails about Google's work on the Pentagon's Project Maven drone-imagery contract drew scrutiny; she told The New York Times that working to weaponize AI was "deeply against my principles". In 2017 she co-founded AI4ALL, a nonprofit that teaches AI to students from groups underrepresented in the field.
In 2024 she founded World Labs with Justin Johnson, Christoph Lassner and Ben Mildenhall to build AI that understands and acts in three-dimensional space. It raised about $1 billion in early 2026 from investors including AMD, Nvidia, Autodesk, Emerson Collective and Fidelity, Autodesk's part being $200 million. AMD announced on 28 September 2026 that it would buy the lab for about $8.2 billion in stock, with Li to become AMD's chief scientist reporting to Lisa Su; AMD expects the deal to close before the end of 2026. Li has named Su as an early investor in World Labs.