Stability AI cutting staff in the name of restructuring

Following the departure of CEO Emad Mostaque, UK AI unicorn is shedding employees

Stability AI is preparing to lay off staff as a part of a restructuring process following the resignation of CEO Emad Mostaque, according to an internal memo seen by Reuters on Thursday.

The news comes as Stability released its latest Stable Diffusion LLM to developers on Wednesday.

In March, Mostaque stepped down from the board of the AI startup he founded, which develops the Stable Diffusion image-generation tool. Mostaque said he wanted to pursue decentralised AI.

It is thought that Mostaque also departed due to increasing tensions with investors and a series of high-profile staff exits from the company.

At the time, the company said it actively seeking a permanent CEO to "build upon Stability AI's foundation and lead the company into its next phase of growth," according to a March post from interim co-CEOs Shan Shan Wong and Christian Laforte.

In the internal memo seen by Reuters this week, the pair said that as part of a restructuring plan some roles would have to go: "These decisions have not been taken lightly and they are intended to right-size parts of the business and focus our operations, which is critical to setting us on a more sustainable path."

The number of staff expected to be laid off is unknown, but employees affected will be informed separately, the memo said.

Last October, the AI company had approximately 200 employees globally.

As per PitchBook and Crunchbase, Lightspeed Venture Partners, actor Ashton Kutcher's Sound Ventures, investment management firm Coatue and chipmaker Intel are listed as investors of the AI start-up.

Stability AI released its Stable Diffusion 3 model to developers on Wednesday, accessible through an API.

The company claims its latest model matches or outperforms text-to-image generation systems such as DALL-E 3 and Midjourney v6 in typography and prompt adherence, and said it plans to make the model weights available for self-hosting to subscribing members shortly.