Generative AI company Stability AI says it’s poised to accelerate development of its text-to-image products thanks to a fresh round of investments and a management shakeup.
The model developer on Tuesday announced it has secured investors including venture capital outfits Greycroft and Coatue Management, plus former Facebook president Sean Parker and Prem Akkaraju, a past CEO of special effects house WETA Digital. Parker will serve as executive chairman and Akkaraju will become CEO. Other notable names among the new investors are former Google and Novell boss Eric Schmidt, and investor Robert Nelsen who has been involved in 47 companies that achieved billion-dollar valuations.
Parker is quoted as saying the company will stick to its open-source principles and chase four markets
- Managed image, video, audio pipelines and workflows for developers;
- Custom enterprise models;
- Content creation and production tools serving everyone from independent content creators to major studios;
- Powering B2C applications for generative art, creativity, graphic design, social software, and gaming.
Stability AI has not had a permanent CEO since its founder Emad Mostaque departed in March, reportedly due to investors’ displeasure over the finances that were apparently so bad that it struggled to pay its cloud bills. Whatever the state of the outfit’s books, it did make substantial layoffs.
The company has not disclosed how much it raised, although The Wall Street Journal claims it was $80 million. The investors were also reportedly able to get Stability AI’s suppliers to forgive $100 million in debt, plus a reduction in $300 million of planned future debt – primarily for cloud bills.
The Register asked Stability AI if the figures were correct, but the company would not confirm or deny The Journal’s numbers and declined to comment on its financial viability.
Stabilizing Stability AI will be a challenge for its new executives, as AI firms require lots of capital and – as is the case with many startups – struggle to turn a profit. In 2023, Stability AI reportedly expected revenue of just $11 million, but expected a $99 million bill for computing alone, plus $54 million for wages and other operating expenses.
Another line item that will challenge the company is legal fees: Media library Getty sued Stability AI for copyright theft, a case the AI outfit unsuccessfully tried to have dismissed.
But the announcement doesn’t include product plans, or hints about how Stability AI will make money from its models. The document does, however, note that the company’s AI models top the download charts on open-source AU database Hugging Face, have sparked “significant enterprise interest”, and the formation of “one of the largest and most active AI open-source communities”.
Good luck, investors. ®
