Stable Diffusion image generator behind theUK Artificial Intelligence Startups Stability AI is exploring a sale of the company, as management faces increasing investor pressure over its financial position.
According to various people familiar with the matterThe London-based company has positioned itself as a potential acquisition target in recent weeks and has had preliminary conversations with a number of companiesThe persons requested anonymity because of the private nature of the discussions. These persons requested anonymity because of the private nature of the discussions. They indicated thatNo transaction has yet been concluded and the Company may terminate this process without a sale.
The development underscores the escalating tensions between Stability AI and some of its larger investors. In a letter to management last month, Coatue Management reportedly asked CEO Emad Mostaque to step down. The request came shortly after a funding round led by Coatue that initially valued the startup at $500 million.
A spokesperson for Stability AI said via email:"While several parties have expressed interest in acquiring Stability AI, we are not attempting to sell the company and are focused on releasing leading models."This includes the recently launched video generation product.
In his letter, Coatue reportedly wrote that Mostaque's leadership had led to a number ofadvancedManagement departures leave startups in a fragile financial position.
A spokesperson for Stability AI said, "Our CEO has played a key role in Stability's success. This recent investment underscores the confidence investors have in Stability in this fast-growing market."
Coatue's refusal to representabsoluteLeave a comment on this.
One of the potential buyers, Canadian startup Cohere, is said to be focused on building technology for other companies to create their own AI products, but Cohere has declined to participate in the conversation, according to a person familiar with the matter.
Stability also reached out to Jasper, an AI startup whose software helps companies create marketing materials.
Both Cohere and Jasper's representatives refused to accept the request.absoluteLeave a comment on this.
In 2022, Stability raised $101 million in funding to reach unicorn status. in October, the company accepted theIntelThe Company's investment of nearly $50 million in the form of convertible notes.
Stability AI's software is capable of generating compelling images based on a few prompts, but it has also sparked some controversy, such as producing photorealistic images of Pope Francis in a fez, Emma Watson as a mermaid, and former President Donald Trump sprinting away from a line of FBI agents, prompting growing concerns about deep fakery technology.
Stability AI is reportedly investing heavily to expand its business. At the time of the deal with Intel, Stability was spending roughly $8 million a month on bills and payroll, with revenues being a fraction of that.
Mostaque wrote in a post Monday on Platform X, formerly known as Twitter, that the company had $1.2 million in revenue in August and expects to earn $3 million from software and services this month. The post has since been deleted.
A spokesperson for Stability AI declined to comment on the post.
In late October, Coatue reportedly sent the letter to the company's management following Intel's investment. The company also asked for details on the compensation of Mostaque and other executives.
Last year, Stability AI went on a hiring spree, recruiting researchers from large technology companies to quickly release its open source software. However.Due to the chaotic management culture in MostaquesomeadvancedThe hires were quickly separated.
The company's relationship with investors has been fraught with twists and turns. One of Coatue's general partners is reportedly no longer a director because of Coatue's significant stake in Intel rival Advanced Micro Devices Inc. In addition, a partner at Lightspeed Venture Partners has left his role as an observer on the startup's board.
In September, Intel described the startup as a new AI superComputer's 'core customers'. It is understood that next month's investment is partly dependent on Stability AI using Intel processors for computing in the coming months.
A spokesperson for Stability AI said, "While we don't disclose the specifics of our partnerships, the funding we receive is not dependent on any particular hardware or cloud service."
A spokesman for Intel declined to comment.