Emad Mostaque, the founder and CEO of Stability AI, has resigned from both the company’s board and the top position, the buzzy firm said on Friday night. This makes Stability AI the second popular AI startup to undergo significant changes this week.
TakeAway Points:
- The Stability AI CEO, Emad Mostaque, resigns his position.
- Stability AI is now focusing on decentralized AI after losing more than half a dozen key talents in recent quarters.
- However, Mostaque still controls most of the company’s shares.
Mostaque Steps Down
In a blog post, Stability AI, which is supported by investors such as Lightspeed Venture Partners and Coatue Management, announced that it has named its COO Shan Shan Wong and CTO Christian Laforte as acting co-CEOs in the interim.
According to Mostaque, Stability AI is stepping down to pursue decentralized AI after losing more than half a dozen key talents in recent quarters. In a series of posts on X, Mostaque opined that one can’t beat “centralized AI” with more “centralized AI,” referring to the ownership structure of top AI startups such as OpenAI and Anthropic.
Furthermore, he said that since he had the most controlling shares, it was his choice to resign from the position of top dog.
“We should have more transparent & distributed governance in AI as it becomes more and more important. It’s a hard problem, but I think we can fix it. The concentration of power in AI is bad for us all. I decided to step down to fix this at Stability & elsewhere,” he added.
Stability AI
Mostaque’s exit from Stability AI, a startup best known for its well-liked image generation tool Stable Diffusion, coincides with an ongoing struggle at the company, which, as of October 2023, was estimated to be spending $8 million per month, according to Bloomberg. The report also mentioned the company’s failed attempt to raise additional funding at a $4 billion valuation.
It seems that until roughly a year ago, Mostaque was not giving revenue growth priority. He laughed at the generative AI businesses’ “weird obsession with revenue” in a post on X last year, despite the fact that “the technology is useful but far from vaguely mature as new advances arise virtually daily.” He gave other instances, such as MagicLeap, which incurred billions of dollars in costs prior to turning a profit.
“The payoffs of proper generative AI R&D are clearer and faster to market than just about anything we’ve seen. It’s going to create way more economic value than self-driving cars; for example, the total investment in that has been $100b with no revenue payoff,” he wrote.
His comments on Reddit last month offered insights into a shift in focus. “We are doing fine and ahead of forecasts this year already. Our aim is to be cash flow positive this year; I think we could get there sooner rather than later,” he wrote.
“The market is huge, and open models will be needed for edge and all regulated industries. This is why we are one of the only companies to open data, code, training run details, and more. Custom models, consulting, and more are huge markets and very reasonable business models around this as we enter enterprise adoption over the next year or so; last year was just testing.”
The press release from Stability AI culminates an incredible week for the AI sector. The business Inflection AI, which has raised over $1.5 billion, revealed on Monday that two of its co-founders and a number of other employees have joined Microsoft, which spearheaded the company’s most recent fundraising round.
