Stability AI, a $1 billion AI company, servicing the globally acclaimed AI art generator Stable Diffusion, is under public scrutiny over allegations of plagiarism and a host of top-level resignations inclusive of CEO, Emad Mostaque. Following the exit of key c-suite personnel, some of the original company members have embarked on a new venture in Japan: Sakana AI.
The dispute began on March 7, 2024, when a competitor in the industry, Midjourney, disclosed a 24-hour system shutdown due to ‘botnet-like activity from paid accounts’. Midjourney alleged that the attempts to copy their prompts and image pairs reported during the outage were direct consequences of subversive actions by Stability AI’s employees. Ironically, both companies are known to use artwork online from artists without their consent.
In the aftermath of the incident, Midjourney announced a ban on all Stability AI employees using its platform. Nick St. Pierre, Midjourney’s creative director, challenged Mostaque to explain the relevant activities of Stability AI employees.
On March 20, Forbes reported the departure of three chief researchers of Stability AI, responsible for the development of Stable Diffusion: Robin Rombach, Andreas Blattmann, and Dominik Lorenz. Prior to this, several executives had also left the company, namely ex-chief people officer Ozden Onder, and ex-chief operating officer Ren Ito.
A month before the allegations from Midjourney, Stability AI received funding from Intel amounting to $50 million. However, a Bloomberg report in November 2023 revealed the company was spending $8 million monthly on wages and other expenses. Subsequently, on March 24, CEO Emad Mostaque announced his resignation, expressing his interest in pursuing decentralised AI.
Simultaneously, a new Japanese AI startup, Sakana AI received a $30 million by investors. Several founding members of Sakana AI were revealed to be former employees of Stability AI, including Ren Ito, alongside senior research scientists Takuya Akiba and Makoto Shing. Anti-AI activists in Japan have accused Sakana AI of being a refuge for Stability AI employees who wish to continue infringing on AI regulations.
In Stability AI, Shan Shan Wong and Christian Laforte, COO and CTO respectively, have been appointed as interim co-CEOs as a damage control exercise amid the organizational chaos.
