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AI-Image-Generator Startup Stable Diffusion may raise $1 billion


With Image Generator Stable Diffusion, you may create a cyberpunk metropolis in the manner of 18th-century Japanese artist Hokusai and right out of science fiction, as well as a portrait of Beyoncé a la Vincent van Gogh and other fantastical images in a matter of seconds. A sophisticated alien world exists. It was just made available to the public two weeks ago, but already it is one of many well-liked AI-powered text-to-image converters, such as DALL-E 2, that have swept the internet.

According to three persons with knowledge of the situation, the organization that created Stable Diffusion is currently in discussions to obtain $100 million from investors. Two sources claim that the London-based startup Sustainability AI received initial interest from the investment group Coatue in a deal that would value it at $500 million. According to two sources, Lightspeed Venture Partners then started negotiations to invest at a valuation of up to $1 billion, which are currently ongoing.

Requests for comment from Stability AI, Coatue, and Lightspeed were rejected.

One of the individuals claimed that the London-based business had previously raised at least $10 million in Safe Notes—a convertible security that is common among early-stage startups—with a valuation of up to $100 million. A fourth direct source was able to corroborate earlier iterations of Sustainability AI. Imad Mostak, the company’s founder and CEO and a former hedge fund manager, provided the majority of the capital directly. There was no prior reporting on the preceding funding.

The Sustainability AI’s core technology is cost-free to utilize by virtue of being open source. Three sources claim that the business plan for the company is currently unclear.However, Mostak claimed last month that he has already teamed with “governments and large organizations” to offer the technology in an interview with machine learning engineer and YouTube personality Yannick Kilcher.“We’ve negotiated a large number of deals, so we’ll be profitable at the door, compared to large corporations that lose most of their money,” he claims.

Mostak, 39, was raised in England but is originally from Bangladesh. He spent 13 years working in a UK hedge fund before earning his master’s degree in mathematics and computer science from the University of Oxford in 2005. His firm Symmetry, which he founded in 2019 with the intention of lowering the cost of technology for those living in poverty, shuttered after a year, according to his LinkedIn profile.

In late 2020, he established Stability AI with the intention of developing an open-source AI project. According to the company’s website, text-to-image generation is just one element of a larger network of AI-powered services that it is working to develop. It also provides funding to other open-source research teams working on tools for biology, audio, and language.

“We’ve negotiated a large number of deals so that we can be profitable at the door, mostly compared to large corporations losing money.”

Imad Mostak, Founder and CEO of Stability AI

The company’s most well-known initiative to date is Stable Diffusion, which was developed in conjunction with researchers at Munich’s Ludwig Maximilian University and RunwayML, a video editing startup also financed by CoTue.With the April release of OpenAI’s DALL-E 2 and the July release of the same-named product from independent research lab Midjourney, AI Image Generators have become a popular topic. In May, Google also unveiled Imagen, a text-to-image technology that isn’t open to the public.According to Mostak and his colleagues, existing technology merely scratches the surface of what AI is capable of doing in terms of artistic creation. Future use cases could involve significantly enhanced photorealism, video, and animation.

These picture generators are already the subject of debate because a large number of them were trained by analyzing billions of photographs from the Internet without the owner’s permission, raising questions about their morality and legality.

A contentious discussion last week

After AI-generated art won the first prize in a Colorado fine arts competition, news of it spread online.

Furthermore, Stable Diffusion is open source, allowing users to get beyond restrictions that DAL-E and MidJourney have in place to prevent the development of graphic or pornographic images.Deepfakes of celebrity nudes produced by AI have appeared in many threads on 4chan, and Reddit has banned at least four communities for posting AI material that is “not safe for work” and was made via static distribution. were passionate about.

This stability is a double-edged sword for artificial intelligence (AI), which has gained popularity in the community thanks to its open source philosophy, which offers its users complete access to its code. According to the company’s website, its objective is “building open AI tools,” which matches OpenAI’s original goal of democratizing access to artificial intelligence.Leading technologists Sam Altman and Elon Musk founded OpenAI as a non-profit research organization. However, in 2019, OpenAI changed its business model and accepted a $1 billion investment from Microsoft. The decision was criticized by the AI community for concentrating on commercializing its technology rather than making it more accessible. Musk himself, too, voiced criticism for the decision.

Sustainability Since its start, AI has operated as a for-profit organization, according to Mostac, in order to expand the audience for open source research. He claimed that the business is entirely independent in an interview with TechCrunch given last month.“No one has any voting rights except our 75 employees – no billionaires, big funds, governments or anyone in control of the company or the communities we support,” he said.

Mostaq will provide new financiers up to 10% of the company at a valuation of $1 billion. Venture capitalists who hold a sizable share in a startup typically look for a board position so they may use their funds to influence the choices the business makes.It is unknown whether Sustainability AI will result in board seats being taken by Lightspeed, which oversees $10 billion in assets, or Coatue, which is in charge of $73 billion.

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