Instability at Stability AI Stability AI CEO steps down as company faces financial and market challenges

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Instability at Stability AI: Stability AI CEO steps down as company faces financial and market challenges

The CEO of Stability AI resigned as the company faces an increasingly competitive market.

What’s new: Emad Mostaque stepped down from Stability AI, developer of the Stable Diffusion image generator among other models, amid financial woes, uncertain direction, and sinking confidence from investors and employees alike, Forbes reported. Mostaque’s departure followed the exits of numerous executives and key employees.

How it works: Stability confirmed Mostaque’s departure in a blog post. The company’s chief operating officer Shan Shan Wong and chief technology officer Christian Laforte will act as co-CEOs until its directors find a permanent replacement. They inherit a company with troubles beyond leadership. 

  • Stability faces serious cash-flow issues. In 2023, it projected $11 million in revenue against $153 million in costs. Currently it spends $8 million monthly compared to revenue of $3 million in November and $5.4 million in February.
  • The company’s bill for processing power provided by Amazon Web Services, Google, and CoreWeave amounts to $99 million annually. It often failed to pay on time. Stability contemplated reselling access to its leased GPUs to make up for its revenue shortfall.
  • Stability struggled to commercialize its models. It tried to strike deals with companies such as Samsung, Snap, and Canva and governments such as Singapore, but the parties couldn’t agree on terms.
  • Throughout 2023, it tried to raise funds by courting investors like Nvidia and Google. Negotiations failed partly over questions about the company’s finances. Ultimately it sought a buyer, but no deal emerged.
  • Stability faces unpredictable liabilities due to lawsuits over its alleged use of copyrighted images as training data and its models’ ability to produce images in the styles of human artists. 

Behind the news: Despite its troubles, Stability continued to release new models. In February, it opened the waitlist for the third-generation version of Stable Diffusion. Last month, it released Stable Video 3D, a project in which the team produced three-dimensional objects from images. This month, it released Stable Audio 2.0, which can produce music files up to three minutes long from a text prompt.

Why it matters: Stability has been a standard bearer for open-source AI in a field where tech giants aim to dominate with closed models. Effective leadership could have a major impact on the models available to developers in the years ahead. 

We’re thinking: Stability helped capture the public imagination during the generative AI boom of 2022, and its open models, particularly its diffusion models, have been a huge benefit to the AI community. We hope new leadership puts the company on firm footing.


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