Key stable diffusion researchers leave Stability AI as company goes into decline

Key members of the team of artificial intelligence researchers who developed Stable Diffusion, the text-to-image generation model that catalyzed the AI boom, have resigned from UK-based Stability AI.

The announcement was made by CEO Emad Mostak at an all-staff meeting last week, according to company officials and other sources familiar with the situation. Robin Rombach, who led the team, and his colleagues Andreas Blattmann and Dominik Lorenz were three of the five authors who developed the main Stable Diffusion study while at the German university. Afterward, they were recruited to Stability. Last month, they helped publish the third edition of the Stable Diffusion model, which for the first time combined the diffusion structure used in previous versions with the transformers used in OpenAI's ChatGPT.

Their departure was the latest blow to the once hotly beloved artificial intelligence company, from which executives are leaving en masse as its cash reserves dwindle and it struggles to raise additional funds.

Stability AI, Rombach and Blattmann did not respond to requests for comment. Lorenz could not be reached for comment.

Stability's success owes much to the Stable Diffusion research, which was originally an academic project between the Ludwig Maximilian University of Munich and the University of Heidelberg. Stability became involved in the project seven months after the original research paper was published, when Mostak offered the researchers some of his company's computing resources to further develop a text-to-image conversion model. Bjorn Ommer, the professor who led the study, said last year that he believed Stability misled the public about its contribution to Stable Diffusion when it launched in August 2022. (At the time, Stability spokesman Motes Bishara said Mostak was "quick to praise and take credit for the work of collaborators.")

The AI generated by the model went viral and fueled the proliferation of generative AI, helping Mostak raise more than $100 million from leading investment firms Coatue and Lightspeed within days of launch. He used some of those funds to hire Ommer's graduate students Rombach, Blattmann, and Lorenz. Their research has kept Stability at the forefront of technical developments in generative artificial intelligence.

Now Rombach and his team have added their names to the fast-growing list of high-profile tech execs who have left Stability AI. VPs Christian Cantrell (product), Scott Draves (engineering), Patrick Hebron (R&D) and Joe Penna (applied machine learning) all left last year. Other notable departures include head of research David Ha and LLMs Stanislav Fort and his successor Luis Castricato. In November, Stability's VP of audio Ed Newton-Rex resigned in protest over Stability and other AI startups' treatment of copyrighted data.

Stability also lost other top executives, including general counsel Adam Avrunin, human resources director Ozden Onder, chief operating officer Ren Ito and vice president of communications Jordan Valdes, who resigned last year, according to their LinkedIns.

This dramatic outcome comes less than 18 months after Stability raised funds in 2022 that valued the company at $1 billion. According to the documents, the company has been facing a cash shortage as salary and computing costs far exceed revenues. Bloomberg previously reported that the company spends $8 million a month. In November 2023, CEO Emad Mostaque tweeted that the company had $1.2 million in revenue in August and would earn $3 million in November. The tweet was later deleted.

Investment firm Coatue has resigned from its board of directors and Lightspeed Venture Partners has given up its observer seat on Stability AI's board of directors in October 2023, Bloomberg reports. According to the report, Coatue called for Mostak to step down as CEO and pushed for a sale of the company. (A company spokesperson told Bloomberg that "our CEO's leadership and management have been instrumental to Stability's success" and the company has no intention of selling the company.)

According to Bloomberg, in the same month, startup Stability AI was thrown a lifeline when it raised $50 million in a convertible promissory note from semiconductor giant Intel INTC. We previously reported that Stability has repeatedly tried to raise $400 million from a number of large investors over the past year.

In February, less than a year after its acquisition, Stability sold Clipdrop, a Paris-based image creation and editing platform, to AI startup Jasper. The company, which has positioned itself as a champion and financial supporter of the open source AI community, also launched a paid tier starting at $20 a month for commercial users of its tools last December.

We previously reported that Stability was struggling to pay payroll and payroll taxes, and the lines between Mostake and his wife and the company's finances were blurring. At one point, cloud computing provider Amazon Web Services threatened to revoke the company's access because of unpaid bills. Stability denies that AWS warned it would restrict access because of late payments.

In addition, Stability AI will have to incur heavy costs defending itself against copyright infringement lawsuits filed by Getty Images and a group of artists in the U.S. and U.K. who claim the company used art and stock photos to train its models. (Stability is fighting these lawsuits, which are currently ongoing).

Rival artificial intelligence imaging company Midjourney blamed the 24-hour outage earlier this month on "botnet-like activity" that it believes was caused by two user accounts associated with Stability AI employees. Midjourney said it is banning all Stability AI employees from accessing the service, as well as anyone who uses "aggressive automation" to search for clues.

Mostak tweeted that the incident was not intentional, and said in a statement to Ars Technica that it was a personal project of an employee.