London’s Stability AI has raised fresh funding and appointed a new-look executive team of industry heavyweights in what could be a lifeline for the business.
The generative AI company revealed the news of the investment from Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners and O’Shaughnessy Ventures, alongside tech executives including Napster founder and former Facebook president Sean Parker, former Google CEO Eric Schmidt, Robert Nelsen and Prem Akkaraju.
Akkaraju, former CEO of visual effects company Weta Digital, has been appointed CEO, while billionaire Parker is now executive chairman.
It comes months after the exit of founder and CEO Emad Mostaque as Stability AI struggled to generate anywhere near enough revenues to cover its cloud computing and other costs.
Reports suggest the investor group has reached a deal with cloud providers and other suppliers to drop $100m it owes and a potential $300m in future obligations.
Stability AI raised $101m in a seed round led by Coatue Management and Lightspeed Venture Partners at a $1 billion dollar valuation in 2022, but has struggled to raise further funds and it generated just $11m in sales in 2023.
Stable Diffusion, Stability AI’s flagship model, has had over 150m total downloads and has played a foundational role in generating most online AI-generated images.
“Stability AI is the backbone of the visual AI ecosystem. The company’s world-class team, breakthrough models and unique developer network attracted me to take on the CEO role,” said Akkaraju.
“We will continue to release the most cutting-edge open models for the community, while meeting the overwhelming demand for AI solutions from large-scale corporations.
“Additionally, Stability AI is now in an ideal position to spearhead the real convergence of generative AI and studio content.”
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Joining Akkaraju and Parker on the new-look board are Dana Settle, co-founder and managing partner of Greycroft; and Colin Bryant, COO and general partner of Coatue Management.
“Stability AI has made a global impact by creating the leading generative image foundation models and fostering the largest ecosystem of generative AI media creators and developers,” said Parker.
“I’m committed to the open-source principles that Stability AI was built upon. These principles have made Stability AI’s open models the most widely used foundational AI image models globally.
“Our investment in Stability AI enables the continued development of open-source, open access, and open-weight models for the benefit of the entire community.”
Jim O’Shaughnessy, retiring chairman of Stability AI, said: “I’m very impressed by the new leadership team of Sean and Prem and the investor group supporting them. I fully believe in their vision and long history of repeated and extraordinary success. I’m delighted to continue to work alongside the Stability AI team as an investor.”
Shan Shan Wong and Christian Laforte, who served as interim co-CEOs since March 2024, will remain with the company as COO and CTO respectively.
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