Stable Diffusion CEO Resigns as Company Crumbles

Can Stability AI survive?

Instability AI

Embattled AI image generator outfit Stability AI — the maker of Stable Diffusion, a breakout competitor to software by bigger outfits like OpenAI's DALL-E — has taken another hit as its CEO has resigned.

The company says that CEO Emad Mostaque has stepped down to "pursue decentralized AI." That's a nice idea, but it has a ring of "my girlfriend goes to another school," since Mostaque has been dogged by credibility issues during his chaotic tenure at Stability.

"On behalf of the Board of Directors, I want to thank Emad for his leadership and relentless commitment to Stability AI and the open source movement," Stability's board chairman Jim O'Shaughnessy said in a statement. "As we search for a permanent CEO, I have full confidence that Shan Shan Wong and Christian Laforte, in their roles as interim co-CEOs, will adeptly steer the company forward in developing and commercializing industry-leading generative AI products."

Mirror Image

Even in the red-hot generative AI market, Stability has been dogged by headlines suggesting serious internal troubles. As early as last April, it was reportedly burning through cash with no clear pathway to profitability. By August, those financial pressures had been joined by legal issues and controversy about Mostaque, who was accused of a "history of exaggeration" including claiming that he had a master's degree from Oxford and that he'd been a spy for the British government.

Later that year there was even more bad press when the outfit's vice president of audio quit in disgust while taking a potshot at the entire industry's technical model, saying he disagreed with the "company’s opinion that training generative AI models on copyrighted works is 'fair use.'" And just last week, it lost three out of five of the original developers who created its model.

Now the question will be whether the company's remaining leadership can turn things around at the crumbling startup.

"I am proud two years after bringing on our first developer to have led Stability to hundreds of millions of downloads and the best models across modalities," Mostaque is quoted as saying in Stability's statement. "I believe strongly in Stability AI’s mission and feel the company is in capable hands. It is now time to ensure AI remains open and decentralised."

More on Stability AI: Stability AI Is Falling Apart