# Stability AI

Stability AI Ltd is a UK-based artificial intelligence company, best known for its text-to-image model Stable Diffusion.

## History and founding

Stability AI was founded in 2019 by Emad Mostaque and by Cyrus Hodes.
In August 2022 Stability AI rose to prominence with the release of its source and weights available text-to-image model Stable Diffusion.
On March 23, 2024, Emad Mostaque stepped down from his position as CEO. The board of directors appointed COO, Shan Shan Wong, and CTO, Christian Laforte, as the interim co-CEOs of Stability AI.
On June 25, 2024, Prem Akkaraju, former CEO of visual effects company Weta Digital, was appointed CEO of the company.

## Funding and investors

A notable milestone in the company's funding history was a $101 million investment round led by Coatue and Lightspeed Venture Partners, with O’Shaughnessy Ventures LLC also participating.
On June 25, 2024, alongside announcing Prem Akkaraju as the new CEO, Stability AI also announced they had closed an initial round of investment from world-class investor groups such as Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners, and O’Shaughnessy Ventures. Sean Parker, entrepreneur, philanthropist, and former President of Facebook, joined the Stability AI Board as Executive Chairman. On September 24, 2024, Stability AI announced that legendary filmmaker, technology innovator, and visual effects pioneer James Cameron had joined its Board of Directors.

## Product and application

Stability AI has made contributions to the field of generative AI, most notably through Stable Diffusion. This AI model allows images to be generated from textual descriptions. Beyond Stable Diffusion, Stability AI also develops Video, Audio, 3D, and text models. Stability AI has partnered with Arm to optimize its text-to-audio model, Stable Audio Open, for mobile devices powered by Arm CPUs.

## Litigation

In July 2023, Stability AI co-founder Cyrus Hodes filed a lawsuit against CEO Emad Mostaque and the company, alleging fraud, misrepresentation, and breach of fiduciary duty. Hodes claimed that Mostaque deceived him into selling his 15% stake in the company for $100 in two transactions in October 2021 and May 2022, based on false representations that Stability AI was essentially worthless. Just three months after the final transaction, Stability AI raised $101 million in funding at a valuation of $1 billion. The lawsuit alleges that at current valuations, Hodes’ stake would be worth over $150 million. Hodes also accused Mostaque of embezzling company funds to pay for personal expenses, including rent for a lavish London apartment, luxury shopping sprees, and a $90,000 diamond ring purchased by Mostaque's wife using company funds.
Separately, Stability AI has faced legal challenges from Getty Images, which accused the company of misusing over 12 million photos from its collection to train its AI image-generation system, Stable Diffusion. This lawsuit, filed in Delaware federal court, is part of broader concerns about the use of copyrighted material in AI training datasets. Getty Images alleges that Stability AI copied these images without proper licensing to enhance Stable Diffusion’s ability to generate accurate depictions from user prompts.