Stability AI Is Imploding

🌈 Abstract

The article discusses the ongoing challenges and controversies surrounding Stability AI, the British AI startup behind the Stable Diffusion image model. It covers the following key points:

• Stability AI is facing a potential collapse, with the departure of key talent including its former CEO Emad Mostaque since March.
• The company has appointed Prem Akkaraju as its new CEO, as part of a plan to address its financial problems and internal struggles.
• Stability AI is facing serious financial issues, having made less than $5 million in the first part of 2024 and losing over $30 million while owing nearly $100 million to various creditors.
• The company's latest product, Stable Diffusion 3 (SD3), has faced backlash due to a new licensing model that restricts how users can use the software, moving away from the company's previous open-source policy.
• The SD3 model is also criticized for its poor performance compared to previous versions, with users reporting issues like the model struggling with images containing humans.
• The community reaction to Stability AI's licensing terms for SD3 has been largely negative, with many voicing their frustrations across social media platforms.

🙋 Q&A

[01] Stability AI's Challenges

1. What are the key challenges facing Stability AI?

• Stability AI is facing a potential collapse, with the departure of key talent including its former CEO Emad Mostaque since March.
• The company is facing serious financial issues, having made less than $5 million in the first part of 2024 and losing over $30 million while owing nearly $100 million to various creditors.
• This financial strain has led to job cuts, with 10% of the staff being laid off, and several key team members leaving the company.

2. How has Stability AI responded to these challenges?

• Stability AI has appointed Prem Akkaraju as its new CEO, as part of a bigger plan to fix the company's financial problems and internal struggles.
• The company has also faced backlash for its latest product, Stable Diffusion 3 (SD3), due to a new licensing model that restricts how users can use the software, moving away from the company's previous open-source policy.

[02] Stable Diffusion 3 (SD3) Controversy

1. What are the key issues with Stability AI's licensing model for Stable Diffusion 3 (SD3)?

• Stability AI is charging $20 a month for creators and developers to use the SD3 model, even if they are running it on their own computers.
• The license also limits users to 6,000 images per month, which is seen as a restrictive policy.
• The license has unclear policies around "derivative works," raising concerns about the ownership and control of fine-tuned models.
• If a user's license ends for any reason, they are required to destroy everything they have made with SD3, including trained models and their outputs.

2. How has the community reacted to Stability AI's licensing terms for SD3?

• The reaction from the community has been largely negative, with many voicing their frustrations across social media platforms.
• The popular platform CivitAI has banned SD3 from its platform due to the lack of clarity in the license.
• Users have criticized the licensing terms as being overly complex and restrictive, especially for a model that is still not performing as well as older versions.