Emad Mostaque, the founder and chief executive of Stability AI, has made the decision to step down from his role as well as the company’s board, the popular unicorn startup announced on Friday evening. This news comes in the midst of significant changes within the hot field of AI, as another high-profile startup undergoes major transformations this week.
- Investors such as Lightspeed Venture Partners and Coatue Management have backed Stability AI.
- The immediate replacement for the CEO position is still being determined.
- In the meantime, the interim co-CEOs will be Shan Shan Wong (COO) and Christian Laforte (CTO).
In an official blog post, Stability AI acknowledged that Mostaque’s departure was due to his desire to focus on decentralized AI. Mostaque shared his perspective on this topic in a series of posts on X, where he argued that the solution to competing with “centralized AI” startups like OpenAI and Anthropic is not to create more “centralized AI.” He highlighted the importance of transparent and distributed governance in AI, stating that this is a challenging but fixable issue. Mostaque also revealed that his decision to step down was influenced by his controlling shares in the company, and he believes that the concentration of power in AI is detrimental to everyone. He stated, “The concentration of power in AI is bad for us all. I decided to step down to fix this at Stability & elsewhere.”
Mostaque’s resignation from Stability AI arrives amidst a tumultuous period for the company. The startup, known for its popular image generation tool Stable Diffusion, has experienced a loss of key talent over the past few quarters. According to Bloomberg, Stability AI was spending an estimated $8 million each month as of October 2023. The news outlet also reported that the company’s attempts to secure new funding at a $4 billion valuation were unsuccessful.
Mostaque’s focus on revenue growth, or lack thereof, was evident in a post on X last year. He expressed his amusement at the “strange focus on revenue” among generative AI companies, despite the technology being far from mature. Mostaque cited examples such as MagicLeap, which spent billions before generating any revenue. He believes that the potential returns from investing in generative AI R&D are far greater and quicker than those in other industries. In fact, he predicts that generative AI will generate more economic value than industries like self-driving cars, which have already received billions in investments but have yet to see significant revenue payoffs.
In a recent Reddit post, Mostaque offered further insights into the company’s shift in focus. He stated, “We are doing fine and ahead of forecasts this year already. Our aim is to be cash flow positive this year, and we may reach this goal sooner than anticipated.” He also emphasized the vast potential of the market for open models in industries such as edge computing and regulated sectors. Mostaque believes that Stability AI is well-positioned to excel in this space due to its commitment to transparency, evident in their approach of open-sourcing data, code, and training run details. He also sees opportunities for the company to branch into custom models, consulting, and other services as enterprise adoption of AI continues to grow in the coming years.
The announcement from Stability AI marks a significant week for the AI industry as another startup, Inflection AI, has also undergone major changes. Microsoft has acquired two of its co-founders and several other employees, marking a significant shift in the company’s direction. Inflection AI, which had raised approximately $1.5 billion in funding, is just one example of the rapidly evolving landscape of the AI industry.
