London-based Stability AI, an open-source generative AI company, announced on Tuesday, June 25 that it has secured undisclosed funding from a consortium of investors.
However, Reuters reported that the company has closed $80M (approximately €75M) in funding.
The investor group includes Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners, O’Shaughnessy Ventures, and renowned operators and tech executives, including Sean Parker, Prem Akkaraju, Eric Schmidt and Robert Nelsen.
Besides funding, the UK company has also announced the appointment of Prem Akkaraju, an investor and highly experienced media, entertainment, and technology executive, as CEO.
Prem Akkaraju, former CEO of visual effects company Weta Digital, a film production and visual effects powerhouse, will assume the role of CEO effective immediately and will focus on driving Stability AI’s go-forward strategy.
Prem Akkaraju, CEO of Stability AI, says, “Stability AI is the backbone of the visual AI ecosystem. The Company’s world-class team, breakthrough models, and unique developer network attracted me to take on the CEO role. We will continue to release the most cutting-edge open models for the community while meeting the overwhelming demand for AI solutions from large-scale corporations. Additionally, Stability AI is now in an ideal position to spearhead the real convergence of generative AI and studio content.”
Sean Parker, entrepreneur, philanthropist, and former President of Facebook, joins the Stability AI Board as Executive Chairman.
Other board members include Dana Settle, Co-Founder and Managing Partner of Greycroft, Colin Bryant, COO, General Partner of Coatue Management, and CEO Prem Akkaraju.
Investors bailed out
In 2022, the company raised $101M in a seed round, led by Coatue Management and Lightspeed Venture Partners, at a $1B valuation.
However, the company has since been facing challenges in raising additional funds due to the lack of a solid business model.
As a result, in March 2024, Emad Mostaque stepped down as the CEO of Stability AI and from its board to pursue decentralised AI.
According to The Information, investors have reached a deal with the company’s cloud providers (from AWS, Google Cloud, and CoreWeave ) and other suppliers to forgive about $100M owed by the company and $300M in future obligations.
Stability AI: Image generation platform
Founded by Mohammad Emad Mostaque, Stability AI is known for its image generation platform Stable Diffusion.
According to the company claims Stable Diffusion has been downloaded over 150 million times and has played a key role in creating many online AI-generated images.
The company’s latest release, Stable Diffusion 3, has quickly become the top-downloaded model with over 2 million downloads since its launch earlier this month.
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