The media reported that the startup Stability AI, which operates in the sphere of artificial intelligence and is known for its Stable Diffusion software designed to create images, was able to raise funding for about $50 million.
The mentioned technology company received the specified funds through a convertible note. The relevant information was published by the media last Thursday, November 9, citing anonymous sources about which there is no data.
A representative of Stability AI, in response to a journalist’s request for comments on the mentioned news, said that as a result of its unique position, the startup has shown interest in fundraising over the past few months, specifying that is meant in this case is receiving funding from large venture and strategic investors. An employee of the company also stated that an announcement regarding the firm’s recent success in securing investments will be made shortly. This is largely an abstract statement of a generalized nature, but at the same time, it contains an actual recognition that the startup has made efforts to raise funds and has certain successes, data on which will be officially released in the future. Perhaps the amount of $50 million mentioned in the media is exaggerated or understated, but the very existence of the secured investments was indirectly confirmed by a startup representative.
Journalists note that the company received funding during a difficult period when the activity of Stability AI is associated not only with solving problems within the framework of specialization but also with overcoming various difficulties. The firm is faced with the problem of senior staff turnover. One of the consequences of this negative trend was the resignation of the head of the personnel department. The startup is also currently experiencing difficulties due to disagreements with representatives of the board of directors. The lack of a unified vision and understanding of the strategy of activity at such a high managerial level will in any case be a negative factor for the company’s activities. The media reports that one of the major sponsors of the startup expressed concern about the CEO of Stability AI Emad Mostaque and is considering appointing another person to this position or establishing the post of president of the firm.
The startup also faced a lawsuit from Cyrus Hodes. He claims that he was the victim of deception. According to Cyrus Hodes, he was persuaded to sell shares at a low price shortly before the company reached the landmark milestone of $1 billion. The firm rejects these claims, claiming that in this case there were no manipulations aimed at obtaining financial benefits by misleading one of the owners of the company’s securities.
Also, the current problems of the startup are related to the fact that Stability AI was on the list of those developers of artificial intelligence technologies that copyright holders sued, claiming unauthorized use of materials belonging to them to teach advanced technology systems.
At the same time, the company, which has to overcome many problems, positively assesses its prospects, not considering a negative scenario as the only possible option for the future. The startup notes that such a phenomenon as staff turnover is absolutely normal for the ecosystem of firms that are at the initial stage of existence.
Stability AI also reported a significant increase in revenue. The startup said that this indicator has grown tenfold over the past year. In the summer, Emad Mostaque said that the projected annual revenue of the firm as of October last year amounted to $10 million, but then this figure decreased because Stability AI focused on research and development. The announcement of a tenfold increase in revenue was made this week. The startup also expects that this indicator will continue to grow until the end of the current year as a result of the release of new products.
A representative of Stability AI in a special comment to the media stated that the company is currently in a strong, healthy position to continue its work in the sphere of generative artificial intelligence.
As we have reported earlier, Reality Defender Raises $15 Million to Detect Deepfakes.