The CEO of a second artificial intelligence (AI) startup is facing pressure to resign, following Sam Altman’s recent victory in a power struggle at OpenAI, the company behind ChatGPT.
Emad Mostaque, the founder and leader of British firm Stability AI, has received a request from one of its shareholders to step down.
Coatue Management, a New York-based investment fund that spearheaded funding for Stability last year, sent a letter to the company in October, urging Mr. Mostaque to resign due to alleged leadership issues causing turmoil within the organization.
The turmoil at Stability AI led to the departure of the head of its audio division, Ed Newton-Rex, amidst a dispute regarding the use of copyrighted material without compensation. Newton-Rex criticized AI companies for exploiting creators by utilizing their content to train their generative models.
Stability AI defended its stance on copyright, claiming it falls within the realms of fair use and serves a transformative and socially beneficial purpose.
Despite Coatue Management’s call for leadership change, Stability AI emphasized that the company remains under founder control and downplayed the impact of Coatue’s minority stake on potential changes within the organization.
Recent reports indicate that Stability AI secured approximately \(50 million in funding from Intel, reinforcing investor confidence in the company, which is currently valued at \)1 billion (£790 million).
Stability AI is renowned for its development of Stable Diffusion, a popular AI image generator capable of creating images based on textual cues. The company has faced legal challenges, including a lawsuit from Getty Images for copyright violations, which Stability AI is seeking to have dismissed.
The discord between Coatue Management and Stability AI surfaces shortly after the internal conflict at OpenAI, a prominent US competitor of Stability AI. The upheaval at OpenAI resulted in the removal and subsequent reinstatement of Sam Altman as CEO, prompting discussions on the governance and regulation of AI startups.
Additionally, Stability AI confirmed receiving acquisition and merger proposals from competitors but asserted its commitment to independence, prioritizing the release of cutting-edge AI models over potential buyout offers.
