Emad Mostaque, the founder of generative AI startup Stability AI, has announced his plans to step down as CEO. Mostaque disclosed his decision at the Abundance360 conference in Los Angeles, where he was a speaker. The company has confirmed his resignation and appointed Shan Shan Wong and Christian Laforte as interim co-CEOs while they search for a permanent replacement. Mostaque will now focus on “decentralized AI,” although he did not provide further details.
The decision comes amidst employee discontent at Stability AI, with key researchers behind Stable Diffusion departing, along with the head of strategic partnerships, Tyler Saltsman. Five sources indicated that Saltsman’s departure was due to frustrations over the company’s commercialization efforts. He is now planning to start his own company called “Edge,” and it is speculated that Mostaque may assist him after stepping down as CEO. Additionally, Mostaque expressed interest in working on AI-related projects in the healthcare space.
Executives and investors, including venture capital firms Coatue and Lightspeed Venture Partners, have been urging Mostaque to step down as CEO since the fall. Several executives have already left the company, including the chief people officer, general counsel, and vice president of applied machine learning. Mostaque’s reputation in the AI sector has been marred by accusations of exaggeration and overstatement, particularly regarding his academic background and Stability AI’s role in the development of Stable Diffusion.
Despite the challenges faced by Stability AI, Mostaque was able to raise over $100 million at a $1 billion valuation for the company. However, the company has been struggling financially, reportedly burning about $8 million a month as of October 2023. Attempts to raise additional funds at a $4 billion valuation have not been successful. Mostaque has remained optimistic publicly, stating his aim to achieve cash flow positivity this year and describing his planned resignation as the successful fulfillment of a mission. Investors and executives have been pressuring him to step down as CEO as the company faces continued challenges.
