What exactly is happening with the bustling Stability AI business?
Image source: Generated by Wujie AI
What's going on? Just after the release of SDXL Turbo and Stable Video Diffusion, which received numerous accolades and also secured the top spot as the most popular AI institution among the 15 major AI institutions by Hugging Face, the star company Stability AI is being reported to be selling its business.
Is a "drama storm" like OpenAI's starting to brew in the industry?
According to sources, due to increasing pressure from investors on its financial situation, Stability AI has recently positioned itself as an acquisition target and engaged in discussions with several artificial intelligence companies such as Cohere and Japer.
Although a spokesperson for Stability immediately responded, stating "while several parties have expressed interest in acquiring Stability AI, the company has no intention of selling and is instead focused on releasing leading models." However, where there's smoke, there's fire. The emergence of this revelation has truly piqued curiosity about what exactly is happening with the bustling Stability AI business.
Frequent Departure of Talent, Investors Pressuring CEO to Step Down
Reportedly, as a former darling of venture capital, Stability AI is currently experiencing escalating tensions with some of its largest investors. Some sources have indicated that a year ago, Coatue Management, which co-led the investment in Stability AI with Lightspeed Venture Partners, wrote a letter to the company's management last month, demanding the resignation of its CEO, Emad Mostaque.
Coatue stated that Mostaque's leadership led to several senior managers resigning and put the financial situation of the startup in jeopardy.
Indeed, the management of Stability AI has been in turmoil recently. In mid-November, Stability AI's head of audio, Ed Newton-Rex, resigned due to differing views on copyright protection. In October, Stability AI's general counsel, Adam Avrunin, and HR director, Ozden Onder, also chose to leave the company, but the reasons are unclear.
Earlier, Christian Cantrell, who had worked at Adobe for nearly 20 years, resigned less than a year after joining Stability AI as vice president of product; futurist Daniel Jeffries left his position as chief information officer at Stability AI after just 7 months. Additionally, Stability AI's research director, David Ha, and chief operating officer, Ren Ito, were also reported to have resigned after less than a year in their roles.
While it's unclear whether these executive departures are directly related to Mostaque's leadership, it's worth noting that as early as June this year, this CEO was exposed by Forbes!
According to reports, the source code for Stable Diffusion was actually written by another group of researchers, and Mostaque, after "appropriating" the work of others, used his eloquence to transform Stability AI into a startup valued at $1 billion. Furthermore, this CEO has multiple black marks, including fabricating educational and work experience credentials.
However, in the face of questioning from "patron investors," a spokesperson for Stability stated, "the leadership and management of our CEO are crucial to Stability's success." "Recent investments also underscore investors' confidence in Stability in this rapidly growing market."
Unfavorable Financial Situation, Disharmonious Investment Relations
In addition to questioning the leadership of Stability AI, the company's financial situation has also become a cause for concern among investors.
It is reported that Stability AI raised $101 million in 2022, becoming a unicorn company. In October of this year, the company also received nearly $50 million in investment from Intel in the form of convertible notes.
However, two insiders revealed that when the deal with Intel was reached, Stability's monthly bills and payroll amounted to about $8 million, while the revenue was only a small fraction of this figure.
Furthermore, Mostaque posted an article on the former Twitter platform X on Monday, stating that the company's revenue in August was $1.2 million, and the revenue from software and services this month is expected to reach $3 million. However, this post has been deleted. A spokesperson for Stability AI also declined to comment on this.
According to insiders, Coatue sent this letter to the company's management at the end of October after Intel's investment. In the letter, the company also requested details of Mostaque and other executives' compensation. After all, according to previous transaction screenshots from Forbes, tens of thousands of pounds were transferred from Stability AI's corporate account to Mostaque's wife's personal account, although a spokesperson for Stability explained that this was because "initially, the Mostaque couple provided a loan to the company."
In addition, Stability AI's relationship with investors has been far from harmonious. Sri Viswanath, a general partner at Coatue, is no longer a director. This is reportedly due to Intel's investment in Stability, while Coatue holds a significant stake in Intel's competitor, Advanced Micro Devices. Additionally, earlier, a partner at Lightspeed Venture Partners also stepped down from the company's board observer position.
As today's "palace intrigue" drama finally concludes with Altman officially returning to OpenAI as CEO, how will the drama of Stability AI unfold?
Reference links:
- https://www.bloomberg.com/news/articles/2023-11-29/stability-ai-has-explored-sale-as-investor-urges-ceo-to-resign
- https://mp.weixin.qq.com/s/9rWnyy5xhyzfocebAajpsw
- https://mp.weixin.qq.com/s/N-TqczRW_bpg6Si5_F5LOg
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
