The future of StabilityAI, once seen as among the world’s most promising artificial intelligence start-ups, has been thrown into doubt following the chaotic departure of its founder and concern it will struggle to become profitable.
Emad Mostaque resigned last week as chief executive of the London-based group behind Stable Diffusion, an AI model that can create images through simple written prompts, with its app being downloaded more than 150 million times.
The 3-year-old company was valued at $1 billion in August 2022, following a $101 million funding round led by top US tech investors Coatue and Lightspeed Venture Partners. The deal put it in the vanguard of the generative AI revolution alongside groups such as OpenAI and Inflection.
Mostaque, an Oxford university-educated mathematician who is often described as a “visionary” by those who have worked with him, said he was leaving Stability to focus on a lofty goal of ensuring the technology will benefit humanity.
“The concentration of power in AI is bad for us all . . . I decided to step down to fix this at Stability & elsewhere,” he posted on X. Mostaque told the Financial Times that he retained his shares but was handing over voting control to other board members who would prioritize open source and the company.
However, others, including former executives and existing investors, describe Mostaque as an unreliable leader who had faced mounting pressure from Stability’s financial backers over a string of legal battles, rising costs and a failure to monetize its products.
The conflicting perspectives highlight how confusion had come to characterize Stability’s operations in recent months.
“Emad did not care at all about the commercial mission,” said one person close to Mostaque and Stability.
Mostaque described this assessment as “silly” and said that he had focused this year on “ramping revenue as we moved from early adopter to mass-enterprise adoption.”
Stability said it “develops and will continue to develop best-in-class generative AI models.”
Over recent weeks, Mostaque told multiple people that he was about to resign, including at this month’s Abundance360 conference in Los Angeles, according to people with knowledge of those discussions that were first reported by Forbes.
Stability’s board was shocked to hear that Mostaque had been announcing his exit before officially notifying them, according to one person familiar with the discussions. Mostaque said the board was aware of his intentions.
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