Stability AI founder and CEO Emad Mostaque has stepped down from the unicorn startup’s top role and board, the buzzy company said Friday night, making it the second hot artificial intelligence startup to undergo major changes this week.
Stability AI, which has been backed by investors including Lightspeed Venture Partners and Coatue Management, has no immediate permanent replacement for the CEO role, but has appointed COO Shan Shan Wong and CTO Christian Laforte as interim co- CEO. he said in a blog post.
Stability AI, which has lost more than half a dozen key talent in recent quarters, said Mostaque is stepping down to pursue decentralized artificial intelligence. In a series of posts on X, Mosaque gave an opinion that one cannot beat “central AI” with more “central AI,” referring to the ownership structure of leading AI startups such as OpenAI and Anthropic.
He in addition he claimed that it was his decision to step down from the top role as he held the largest number of controlling shares. “We should have more transparent and distributed governance in AI as it becomes more important. Of [sic] a difficult problem, but I think we can fix it…” he added. “Concentration of power in artificial intelligence is bad for all of us. I’ve decided to resign to fix this at Stability & elsewhere.”
Mostaque’s departure from Stability AI, a startup known for its popular imaging tool Stable Diffusion, comes amid an ongoing battle at the startup that was spending a reported valuation 8 million dollars a month from October 2023, according to Bloomberg, which also noted that the startup had unsuccessfully attempted to raise new funding at a $4 billion valuation.
Mostaque, it seems, was not prioritizing revenue growth about a year ago. In a post on X last year, he expressed amusement at AI companies’ “strange focus on revenue” even as “the technology is useful but far from vaguely mature as new discoveries happen almost daily.” He cited several examples, including MagicLeap, which spent billions before generating revenue.
“The returns on the right productive AI R&D are clearer and faster to market than anything we’ve seen. It will generate much more economic value than self-driving cars, for example, the total investment in which was $100 billion without any revenue being generated,” he wrote.
Of comments on Reddit last month offered insight into a shift in focus. “We are doing well and ahead of forecasts already this year. Our goal is to be cash flow positive this year, think we could get there sooner rather than later,” he wrote.
“The market is huge and open models will be needed for cutting edge and all regulated industries. That’s why we’re one of the only companies to open up data, code, training execution details, and more. Custom models, consulting and more are huge markets and very logical business models around that as we’ll get into enterprise adoption in the next year or so, last year was just testing.”
The announcement of Stability AI caps off a remarkable week for the AI industry. Inflection AI, a startup that had raised about $1.5 billion, announced Monday that two of its co-founders as well as several other staff members had joined Microsoft, which led the startup’s latest funding round.
