Emad Mostaque, the founder and CEO of Stability AI, has resigned from his position, along with his seat on the company’s board, the company announced Friday evening. This marks the second significant leadership change in the AI startup realm this week.
Stability AI, supported by prominent investors like Lightspeed Venture Partners and Coatue Management, has not named a permanent successor for the CEO position. However, it has designated Shan Shan Wong, the COO, and Christian Laforte, the CTO, as interim co-CEOs, as disclosed in a blog post.
Stability AI, which has experienced the departure of numerous key talents in recent quarters, has announced that Emad Mostaque is resigning to pursue decentralized AI initiatives. Mostaque, in a series of posts on X, argued against the notion of countering “centralized AI” with further “centralized AI,” pointing to the ownership structures of leading AI startups like OpenAI and Anthropic.
Mostaque emphasized that his decision to step down was driven by his significant ownership stake and the belief in the necessity of transparent and distributed governance in AI, stating, “The concentration of power in AI is detrimental to us all.” He expressed confidence in addressing this issue, both within Stability AI and across the broader AI landscape.
Mostaque’s departure from Stability AI, renowned for its popular image generation tool Stable Diffusion, occurs amidst ongoing challenges at the startup. Reports from Bloomberg suggest that as of October 2023, the company was burning through an estimated $8 million each month. Bloomberg also highlighted the startup’s unsuccessful attempts to secure new funding at a valuation of $4 billion.
It seems that Mostaque’s priorities didn’t align with immediate revenue growth about a year ago. In a post on X last year, he expressed amusement at generative AI companies’ emphasis on revenue, noting that the technology was still evolving rapidly with new breakthroughs occurring frequently. He cited examples such as MagicLeap, which invested billions before generating revenue.
In a statement, Mostaque highlighted the potential of proper generative AI R&D, asserting that the returns are more evident and faster to market compared to many other innovations. He suggested that generative AI could generate significantly more economic value than endeavors like self-driving cars, which have seen substantial investment but limited revenue returns.
Mostaque’s recent comments on Reddit indicate a shift in focus for Stability AI. He noted that the company is performing well and exceeding forecasts for the year. Moreover, he expressed confidence in achieving cash flow positivity by the end of the year, possibly even ahead of schedule.
“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.”
Stability AI’s announcement caps a remarkable week for the AI industry. Inflection AI, a startup that had raised about $1.5 billion, announced on Monday that two of its co-founders as well as several other staff had joined Microsoft, which led the startup’s most recent funding round.
