Stability AI, Makers of Stable Diffusion, Could Be in Huge Trouble

Stability AI is the company behind the leading AI image generator Stable Diffusion. But despite early success, it appears all is not well at one of the world’s hottest startups.

The news this week that three researchers who developed Stable Diffusion have left the company, following a number of executives out the door, has left Stability AI in crisis.

Robin Rombach, Andreas Blattmann, and Dominik Lorenz essentially created Stable Diffusion while at a German university. Stability AI got involved after the publication of their research and offered them the company’s computing resources. According to Forbes, all three have now left Stability AI which is also experiencing cash flow problems.

The common perception is that much of Stability AI’s success can be traced back to the German researchers’ work and criticisms have been made of the company’s CEO Emad Mostaque for taking too much credit for the base model.

“Stability, as far as I know, did not even know about this thing when we created it,” Björn Ommer, the professor who supervised the research, told Forbes. “They jumped on this wagon only later on.”

“One thing you learned from that is if you have a company with a huge press department, you can rebrand history in your interest.”

After its fundraising venture, Stability AI was valued at $1 billion but Bloomberg estimates the company is spending $8 million a month with CEO Emad Mostaque tweeting that his company was on course to generate $3 million for the month of November 2023 — the tweet was later deleted.

Mostaque himself is a controversial figure and has been accused of exaggerating his educational achievements and his links to major organizations. Last week, Midjourney blocked all Stability AI employees after alleged data theft attempts.

There have also been allegations that Stability AI has struggled to pay its bills — including employee salaries. A report that Amazon Web Services (AWS) threatened to deny the company access to its services over unpaid bills was also aired by Forbes.

Adding to the mess is the lawsuit the company is facing on both sides of the Atlantic brought by Getty Images which claims Stability used 12 million of its photos unlawfully.