tability AI founder Emad Mostaque took the stage last week at the Terranea Resort in Palos Verdes, California to roaring applause and an introduction from an AI-generated Aristotle who announced him as “a modern Prometheus” with “the astuteness of Athena and the vision of Daedalus.”
After starting Stability in 2019, Mostaque built the company into an early AI juggernaut by seizing upon a promising research project that would become Stable Diffusion and funding it into a business reality. The ease with which the software generated detailed images from the simplest text prompts immediately captivated the public: 10 million people used it on any given day, the company
But the costs associated with so much compute were now threatening to sink the company. According to an internal October financial forecast seen by, Stability was on track to spend $99 million on compute in 2023. It noted as well that Stability was “underpaying AWS bills for July ” and “not planning to pay AWS at the end of October for August usage .” Then there were the September and October bills, plus $1 million owed to Google Cloud and $600,000 to GPU cloud data center CoreWeave.
“In particular, we are surprised and deeply concerned by a cash position just now disclosed to us that is inconsistent with prior discussions on this topic,” Lightspeed’s general counsel Brett Nissenberg wrote in the letter, a copy of which was viewed by. “Lightspeed believes that the company is not likely financeable on terms that would assure the company’s long term sound financial position.” in November that Stability approached AI startups Cohere and Jasper to gauge their interest.
When Stability’s senior leadership convened in London for the CogX conference in September, the financing had still not closed. There, a group of executives confronted Mostaque asking questions about the company’s cash position and runway, according to three people with direct knowledge of the incident. They did not get the clarity they’d hoped for.
“It’s not that there was not an appetite to pay Stability — there were tons of companies that would have that wanted to,” the former employee said. “There was a huge opportunity and demand, but just a resistance to execution.” As Stability careened from one new business idea to another, resources were abruptly reallocated and researchers reassigned. The whiplash shifts in a largely siloed organization demoralized and infuriated employees. “There were ‘urgent’ things, ‘urgent urgent’ things and ‘most urgent,’” one former employee complained. “None of these things seem important ifAnother former Stability executive was far more pointed in their assessment.
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