In early 2024, the future of Stability AI, the company behind the image generator Stable Diffusion, was undeniably grim. The departure of its founder and claims of mismanagement and mounting financial problems seemed to spell the death knell for the once successful company. But within a year and under the leadership of a new CEO, Stability AI has somehow managed to clear its debt, regained the trust of former investors and even added prominent people like director James Cameron to its board.
“We've seen amazing results in such a short time,” said Prem Akkaraju, who took over as CEO of Stability AI in June while speaking at the Fortune Brainstorm AI conference in San Francisco yesterday (Dec. 9).
Despite making the first waves in productive AI, problems quickly emerged within the London-based company. Founder and CEO Emad Mostaque was fired in March amid a wave of employee departures, claims of internal strife and lawsuits.
However, over the summer, a group of investors including Eric Schmidt, the former CEO of Google and a prominent AI investor, and Sean Parker, the founder of Napster and the former president of Facebook, stepped in and appointed Akkaraju as CEO and gave the company overwhelmed with energy. a much-needed cash injection of up to $80 million.
The investor-led rescue effort even managed to strike a deal with cloud provider Stability AI and other suppliers to forgive $100 million of the company's debt and an additional $300 million in future obligations. “Now we have a clean balance sheet, we have no debt, we have nothing,” said Akkaraju, who added triple-digit growth but declined to disclose revenue details. The company's partners realized that Stability AI, whose Stable Diffusion models contributed to nearly 80 percent of all AI-generated images by 2023, was “too important for the ecosystem to fail,” according to the executive.
Starred board of directors
Armed with a clean slate and new funding, the new leader of Stability AI said his vision for the company going forward includes a focus on API revenue and business licensing opportunities.
Akkaraju, 52, began his acting career at JPMorgan Entertainment Partners and SFX Entertainment before eventually becoming the CEO of Weta Digital, the visual effects company that did much of Cameron's fame. Picture films. Cameron joined the board of Stability AI earlier this year, noting his interest in the intersection of AI and CGI animation as “the next wave” in storytelling.
Akkaraju, who started working with Stability AI before his appointment as CEO in June, said he discussed the company's potential with a respected director when he first got involved. Both groups agreed that Stability AI “should be looked at,” the CEO said.
Another new addition to the Stability AI board was Coatue Management, who rejoined the company's board after leaving last year. Along with other early investors such as Lightspeed Venture Partner and Sound Ventures, the company also decided to reinvest in the AI company. “They saw that progress was being made,” said Akkaraju, who noted that he was also surprised by the company's return. “It wasn't on my bingo card either.”
