Stability AI founder Mostaque hits back at media skepticism

The big tree attracts the wind, and now the "biggest tree" in the technology circle is the AI startup that has become a hot spot through this wave of big language models.

Apart from OpenAI, the hottest AI company is the company's current valuation of more than 1 billion US dollars, which is the most promising AI team for investors. Emad Mostaque, the founder of Stability AI, has also become the new Silicon Valley "golden boy".

However, people always have a past. Recently, the Forbes website published a long article. Through interviews with 13 people related to the team, including former employees and AI scholars, the article exposed a lot of black material about this globally-recognized team, especially the founder Emad Mostaque. issues of individuals, technology sources, and company management.

**The article stated that Mostaque, the founder of Stability AI, exaggerated his role in major AI projects, and in fact directly used the results of research teams at German universities. **

The article also pointed out that he also exaggerated his income and partners, and investors had many doubts about his sustainable development. In addition**, there are tax and salary arrears within the company, and his wife has also transferred funds from the company account. **

In the early hours of June 5 local time, Mostaque also quickly responded on his personal blog, refuting the allegations in the media article.

Mostaque said that as the company's influence has expanded, it is not surprising that ** has become a target of media attacks, and accused Forbes of "countless false allegations and distortions." At the same time, Mostaque also stated, "Throughout my career, I have always been quick to praise and credit the work of collaborators. I apologize for any mistakes I made and always strive to continuously improve."**

The following are the key questions in Forbes magazine, as well as the item-by-item rebuttals in Mostaque’s blog post:

01. Question 1: Stealing Technology

The first is the issue of model technology. The source of the source code behind Stable Diffusion is not Mostaque himself.

Originally a group of mostly German academics created an open-source image generator called Latent Diffusion, which according to professor Bjrn Ommer, who led a research team at the Universities of Munich and Heidelberg, was working with a New York-based artificial intelligence startup called Runway. It was launched under the circumstances that the model had only dozens of Nvidia GPUs for training.

In June 2022, Mostaque proposed to this group of German scholars that Stability could provide supercomputers. For German researchers facing high computing costs, this will undoubtedly benefit the performance development of Latent Diffusion, so they accepted. In August of the same year, a new model was launched, named Stable Diffusion.

The German professor Bjrn Ommer who led the research at the time said that when their image generation model was first born, Stability didn't know the existence of the model, they joined later, and Stability's huge news and propaganda department reshaped the history. Former Stability employees also believe that this is "labeling other people's work with their own name." **

During the financing process, Stability described Stable Diffusion as "our" model, without mentioning the original researchers in Germany. A press release announcing the funding stated that “Stability AI is the company behind Stable Diffusion,” without mentioning the creator.

The founder retorted:

In response, Mostaque responded on his personal blog, saying that the company has recognized their contributions on the website and on Stable Diffusion's GitHub page.

02. Question 2: Falsified resume and exaggerated publicity

The founder of Stability AI, Emad Mostaque, is an Indian who grew up in the UK and was a hedge fund manager before starting his business. He billed himself as a good programmer, but his background, technical ability and penchant for hype raised questions.

** According to Forbes, Mostaque currently only holds an undergraduate degree, not a master's degree from Oxford University as he claims. **

Judging from his resume, Mostaque worked for Pictet, a Swiss fund management company, Capricorn, a hedge fund, and some start-up companies after graduation, until he founded Stability in 2019. The company has shifted its development focus several times, and once studied the establishment of a vending machine in London A network of freezers, and an emotional support dog NFT.

**Until the rapid development of generative AI, Mostaque saw an opportunity and repositioned Stability as a unicorn AI company, telling investors that he would build a supercomputer to challenge giants like Google and OpenAI. **

Stability's supercomputers are said to be built from thousands of Nvidia's most advanced GPUs and receive an 80% discount on Amazon's cloud computing services, rendering the ordinary deal with Amazon as a "strategic partnership" in financing documents .

But internal Amazon executives dismissed that claim, saying Stability was no different than any other customer. Stability employees also broke the news that Amazon had threatened to revoke the company's access rights because it defaulted on Amazon's bills before receiving venture capital. **

In addition, Mostaque once called himself "the head of AI for the United Nations' new crown epidemic." According to former employees, agencies such as the Organization for Economic Co-operation and Development (OECD), the World Health Organization (WHO) and the World Bank were listed as partners in pitches for investor presentations at Mostaque's direction. **But all three organizations have denied working with Stability. **

The founder responded:

Resume fraud

In response to Forbes' attack, Mostaque responded on his personal blog: "I didn't attend the graduation ceremony to collect my degree certificate, so technically, I didn't actually get a bachelor's degree or a master's degree. I have paid more than £60 Received these certificates in the mail and plan to complete them next month. Hopefully I will be able to attend graduation in person.”

AWS Partnership

Regarding the cooperation with Amazon, Mostaque responded on his personal blog: "We have established a strategic business alliance with Amazon and AWS. As part of this strategic business alliance, AWS built a Stability in August 2022. Very rare dedicated compute clusters." "As we scaled up, we did have some payment timing issues (especially with credits etc.) and all of those issues were resolved in August."

WHO Cooperation

Regarding the work with the United Nations around the new crown pneumonia, Mostaque responded in his personal blog that they have worked with these organizations in the CAIAC project, which ends before the summer of 2022, which is a relevant experience and does not represent the expression of the current position.

03. Question 3: Husband and wife control the company and default on salary

According to eight former employees, Stability had wage arrears and tax arrears. Last year, the British tax agency visited the company's office and threatened to seize assets due to tax arrears.

**At the same time, the problems arising from the "mom-and-pop shop" have also been questioned. **Mostaque's wife, Zehra Qureshi, a former communications executive who later sat on the company's board, transferred tens of thousands of pounds from the company's bank accounts.

In response, a Stability spokesperson said it was a "mutual loan to the company" between the spouses and that "any borrowing between Mostaque and Qureshi is to be fully settled by the end of 2022". Qureshi stated through a lawyer's statement that he has been providing emotional and financial support to her husband's career since 2021.

At the same time, some employees broke the news that the founder's wife was too harsh on the employees, causing some employees to be overwhelmed and even cry. The founder's wife also served as the company's chief operating officer, but a Stability spokesperson denied that she held that position. At present, the founder claims that his wife has left the company, but the organization chart shows that she is still in the company as a "foundation director".

The founder responded:

Arrears of wages

To this question, Mostaque responded in his personal blog that all wages and taxes owed have been compensated and they have been working hard to strengthen and improve all these processes.

"Mom and pop shop" problem

On these issues, Mostaque did not mention his wife in his response posted on his personal blog, only mentioning that he will "work hard to strengthen and improve our human resources processes."

04. Question 4: Exaggerated income, financing obstacles

According to the article, During the financing process, Stability AI still had the problem of lack of due diligence. When Stable Diffusion quickly became popular, the company only took 6 days to obtain 100 million US dollars in funding from venture capital.

Less than two months after Stable Diffusion was launched, **Mostaque claimed that the company’s annual revenue exceeded tens of millions of dollars, but insiders broke the news that the actual revenue was less than $10 million, and the company’s cash burn rate far exceeded revenue. **

Many potential investors have expressed skepticism privately about some of Mostaque's claims. The Stability founder has been trying to raise more money at a valuation of about $4 billion.

Judging from Mostaque's external statement, the company has no problems in financing. But venture capitalists broke the news that Mostaque had been pitching them and other investors a $400 million new financing plan for months, but they were all turned down. **

The founder responded:

On the issue of raising funds, Mostaque did not respond in more detail on his personal blog, saying only that "like many other start-ups, we are still in discussions with strategic investors."

05. Question 5: Copyright Difficulty

In addition, Stability is also facing infringement lawsuits, alleging that model training violates copyright law, and two lawsuits are awaiting court review.

In a class action lawsuit brought by an artist, Stability filed a motion to dismiss on the grounds that the artist failed to identify any specific infringements.

In another lawsuit, filed by Getty Images, Stability said the venue lacked jurisdiction and moved to change the venue or dismiss the case entirely.

In addition, representatives of the Democratic Party issued an open letter opposing the open source nature of Stable Diffusion, arguing that the model has been abused, such as being used to generate images of "battered Asian women" and "pornography involving real people."

In response, a Stability spokesperson said that the new version of Stable Diffusion has filters for potentially unsafe content to help prevent users from generating harmful images.

Mostaque did not respond to the infringement lawsuit in his latest statement on his personal blog.

Interestingly, in Emad Mostaque's open letter titled "On Setting the Record Straight", he wants to show that the object of his heart is not the public, but the Stability AI team members.

Emad Mostaque calls the team's mission "to make the world a happier place," and luckily, "he has an amazing and growing team" to make it happen.

"Let's ship so they can't ignore the good we do." Stability AI founder wrote at the end of the open letter.

参考资料：Forbes：The AI Founder Taking Credit For Stable Diffusion』s Success Has A History Of Exaggeration Blog：On Setting the Record Straight