It's such a big fuss that the boss ran away and Stability AI's work was in vain?

Source: Heart of the Metaverse

Stability AI co-founder and CEO Emad Mostaque announced his resignation, giving the already troubled British artificial intelligence company Adding to the pressure is the startup, which has recently been hit by a wave of executive departures and funding problems.

01. The CEO resigned and the company fell into financial difficulties

Mostaque will be replaced by Stability AI chief operating officer Shan Shan Wong and chief technology officer Christian Laforte. will serve as interim co-CEO until a permanent successor is found.

Stability AI is currently one of the most famous generative artificial intelligence startups. Its Stable Diffusion model popularized the concept of text-to-image generation and emerged at the same time as OpenAI’s ChatGPT. It set off a craze for artificial intelligence.

The company caught the attention of investors early on, valued at over $1 billion in 2022, and has expanded into other generative applications following its initial success. Artificial intelligence areas such as text and video generation.

However, Stability AI later began to run into trouble. Mostaque hinted in a post on X that he was unhappy with the direction the company had taken in recent months. He said: "You can't defeat centralized AI with more centralized AI."

Mostaque refers to the ownership structure of top AI startups such as OpenAI and Anthropic PMC.

In addition, Mostaque also said that because he holds the largest controlling stake in the company, he decided to step down.

Mostaque added: “As AI becomes more and more important, we should have more transparent and decentralized governance of it. It’s a tough question. , but I think we can solve it."

"The concentration of power in artificial intelligence is bad for all of us, and I have decided to step down and solve this problem somewhere other than Stability."

Stability AI may have created one of the most popular text-to-image generation models, but the popularity of its product certainly didn't translate into financial success.

Last year, Bloomberg reported that the startup was considering selling itself as investors pressured its management over its financial health.

Stability AI has reportedly had early discussions with multiple companies about possible acquisitions, but nothing seems to have come of it so far. Currently, the company spends $8 million per month with little return, most of which is presumed to be technology investment expenses.

02. Core members have left one after another

In addition, Stability AI’s employee turnover rate is also surprisingly high . Just five days ago, Forbes reported that some key members of the company's artificial intelligence research team responsible for developing Stable Diffusion were leaving.

According to Forbes, Robin Rombach, researchers Andreas Blattmann and Dominik Lorenz, who led the team, have all resigned.

Prior to their departures, Stability AI vice presidents Christian Cantrell (product), Scott Draves (engineering), Patrick Hebron (research and development), and Joe Penna (applied machine learning) all left last year.

Others Departures also include former principal researcher David Ha and vice president of audio Ed Newton-Rex, who reportedly resigned in November in protest of the company's handling of copyrighted data.

Some of Stability AI’s major investors, including Coatue and Lightspeed Venture Partners, also resigned from their seats on the board.

Coatue was reportedly one of the main instigators of Stability AI selling itself and Mostaque resigning.

In July 2023, Forbes stated that Stability AI had difficulty paying employee wages and payroll taxes. Forbes also claimed that Amazon Web Services had threatened to shut down the company's servers for not paying its cloud computing bills, though the startup has publicly denied this.

03. Outside discussions and speculation

Charles King of Pund-IT Inc. said that the exact reason for Mostaque’s departure may never be known, but he Comments about the concentration of power in artificial intelligence suggest his decision is likely in response to pressure from investors or company boards to "seek to be acquired by a larger vendor".

Charles King added: "However, given the financial problems and computational expenses reported by Stability AI, it is difficult to blame its investors. After all, venture capital firms are not charities."

Charles King believes Mostaque's concerns about the concentration of power in artificial intelligence are likely well-founded, given that Microsoft Corp., Google parent Alphabet Inc. and several other companies appear to be expanding their dominance in the artificial intelligence industry.

Charles King said in this regard: "These companies have the financial, computing and intellectual resources to continue to accelerate development, while smaller companies are left behind, begging to be acquired."

“We’ve heard it before in tech areas like e-commerce, search, and cloud computing, and the results are rarely great for markets and consumers. Mostaque’s decision to leave Stability AI and his cryptic warning Very worth thinking about."

" Constellation Research Inc.'s Holger Mueller also expressed his views on this, adding: "It is also difficult to know exactly how bad Stability AI's financial situation is. But if the reports are true, I think this is likely to trigger a major upheaval in the generative AI industry. ”

Holger Mueller also said: “This may mark the first wave of integration of first-generation generative artificial intelligence vendors like Stability AI. ”

“Funding is critical for these startups because training and running artificial intelligence is extremely expensive, and this type of executive turmoil can affect investor confidence. "

On the other hand, Mueller also expressed other views: "Mostaque's departure may also bring some positive factors. ”

“Mostaque’s tweet suggests that talent is starting to flow within the generative AI startup ecosystem, which may not be a bad thing as companies of varying sizes and maturity Startups require different skills. But we should be concerned about where the talent is going, is it going based on investor money? ”

Mostaque himself has been controversial at times. Last year, he was sued by Cyrus Hodes, another co-founder of Stability AI.

Cyrus Hodes said Mostaque completed a round at the company Mostaque has made some barely credible claims recently, claiming to multiple people that he had previously was a "spy" for the British government, but no evidence was provided to support this claim.