Stability AI, the beleaguered generative artificial intelligence startup behind Stable Diffusion, has raised latest money. However, he is not going to reveal how much.
Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners, O’Shaughnessy Ventures and angel investors Prem Akkaraju, former Google CEO Eric Schmidt, Robert Nelsen and Napster founder, and former Facebook executive Sean Parker injected latest capital into Stability, revealed on Tuesday in the morning. Parker joined Stability AI as chairman of the board of Stability AI, sitting alongside Greycroft managing partner Dana Settle, Coatue Management chief operating officer Colin Bryant and Akkaraju – who was named Stability CEO – on the company’s board.
“Stable AI has made a global impact by creating leading models for the foundations of generative imaging and supporting the largest ecosystem of generative AI media creators and developers,” Parker said in a statement. “Innovation occurs at the intersection of art and technology: world-class research and applied AI teams collaborate with a vibrant community of artists, modelers and AI developers who have imaginatively expanded the capabilities of the company’s core models.”
The announcement was pre-empted by The Information earlier this week, which briefly revealed it Stable AI was near reaching an agreement with VC facing a money crunch and unpaid cloud bills. Both The Information and Reuters reported on the fundraiser may result in a lower startup valuation; AI Stability declined to comment.
Stability rose to prominence in 2022 with the release of Stable Diffusion, an image-generating artificial intelligence model developed at Ludwig Maximilian University in collaboration with artificial intelligence startup Runway. Stable provided updates to the open source model and built services around it, eventually commercializing it and turning Stable Diffusion into one of the most generally used open image generation models today.
Stability’s ambitions grew in the following years, and the startup ventured into a variety of fields, including coding, text, doodles, music, audio, 3D model generation and video, and even biomedical research. However, the company’s co-founder and former CEO, Emad Mostaque, reportedly mismanaged Stability, leading it to bankruptcy, resulting in worker resignations, the collapse of the partnership with Canva and increased investor concern about Stability’s prospects.
Stability last October he had just $4 million in the bankAccording to reports — a far cry from the capital it has raised in previous years from investors including Intel — value greater than $100 million, it was projected to do just $11 million in sales in 2023. Meanwhile, the company was on the hook for $99 million a yr to rent cloud infrastructure from AWS, Google Cloud and CoreWeave to coach and run its models, and $53 million in operating costs and salaries.
In December, Stability moved to a subscription model for industrial use of its technology, with prices starting at $20 monthly. According to the company, the company was also considering reselling its computing resources as a part of a managed service reporting — and with Lightspeed’s encouragement, he sold himself.
Mostaque left in March under pressure from investors.
New Stability investors, including Schmidt, they allocated $80 million successfully take over Stability; struck a deal with the startup’s vendors to retire roughly $100 million in debt; and negotiated a waiver for Stability of $300 million in future liabilities, much of which can go to cloud infrastructure providers, based on The Wall Street Journal.
It’s unclear where stability is headed. Key talent, including several of the researchers behind Stable Diffusion’s development, in addition to Ed Newton-Rex, who led Stable’s work on generative artificial intelligence, have left. And stability has many faces copyright infringement lawsuits brought by stock image provider Getty Images and other artists who claim their work was used without permission to coach the original Stable Diffusion.
Akkaraju’s experience in visual effects may signal Stability’s client acquisition strategy in the future; Akkaraju was previously CEO of Weta Digital, the FX company responsible for digital effects on movies akin to “Avatar” and the “Lord of the Rings” trilogy. Parker says Stability will focus on developing managed image, video and audio pipelines and workflows, building custom enterprise models and content production tools, and providing APIs to support consumer applications for art, graphic design, social media and gaming.
Wherever Stability’s future takes her, Parker guarantees the company will remain “committed to open source principles.”
“Our investment in Stability AI enables the further development of open source, open access and open-weight models for the benefit of the entire community,” he said. “The market opportunities in generative media – including images, video, 3D, voice and music – are just beginning… This investment will enable the creation of even more powerful models and enable the community to continue pushing the boundaries of human creativity.”