Emad Mostaque, founder and chief executive officer of Stability AI
© 2022 Bloomberg Finance LPStability AI founder Emad Mostaque plans to step down as CEO of the generative AI startup, Forbes has learned.
Mostaque disclosed his plans in private to industry peers earlier this week at the Abundance360 conference in Los Angeles, where he was a speaker, according to three people who he told directly. Stability, the company known for image generator Stable Diffusion, has not yet responded to a request for comment.
After publication, Stability published a press release confirming Mostaque’s resignation. Chief operating officer Shan Shan Wong and chief technology officer Christian Laforte were appointed as interim co-CEOs, and the board of directors said it was conducting a search for a new permanent CEO. Mostaque also relinquished his board seat. He will now pursue “decentralized AI,” the press release stated, without further detail.
Mostaque’s decision to abdicate the CEO role at the company he founded follows a groundswell of employee discontent which reached a new peak this month with the departures of the key researchers behind Stability’s most popular offering, the text-to-image generator Stable Diffusion. That same week, Tyler Saltsman, who headed strategic partnership also resigned. Five people familiar with the matter suggested to Forbes that his decision was driven by frustrations over Stability’s bungled commercialization efforts. They said he plans to start his own company, which is tentatively named “Edge.” Saltsman did not immediately respond to a request for comment.
Multiple sources suggested to Forbes that Mostaque might intend to help Saltsman with Edge after stepping down as Stability’s CEO. Two sources who spoke to Mostaque at the conference said he also wanted to work on AI-related efforts in the healthcare space.
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Since the fall, both executives and Stability’s investors, including venture capital firms Coatue and Lightspeed Venture Partners, have called on Mostaque to relinquish his role as CEO, according to four people familiar with the matter. A number of executives have since left the company, including chief people officer Ozden Onder, general counsel Adam Avrunin and Joe Penna, the vice president of applied machine learning. (The executives could not be reached for comment.)
Mostaque emerged as a key figure in the artificial intelligence sector just as the space was building hype, thanks to the viral success of Stable Diffusion. But his image was marred by accusations of exaggeration and overstatement — about his academic background, Stability AI’s involvement in the development of Stable Diffusion and industry prowess — as Forbes first reported last year. Still, Mostaque was able to raise more than $100 million at a $1 billion valuation for Stability AI.
But within a year, Stability was quickly running out of cash. As of October 2023, it was burning about $8 million a month, Bloomberg previously reported. Attempts to raise additional funds at a $4 billion valuation have largely been unsuccessful, sources told Forbes last year.
Nevertheless, Mostaque has put on a brave face to the public. “Our aim is to be cash flow positive this year,” he wrote on Reddit in February. And even at the conference, he described his planned resignation as the culmination of a successful mission, according to one person briefed.
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