8 ms·

Stability AI Raises $101M at $1B valuation

101 points by obiefernandez 4y ago

pantojax45 4y ago
How does this change their organizational model now they have VC money? > “Nobody has any voting rights except our employees — no billionaires, big funds, governments or anyone else with control of the company or the communities we support. We’re completely independent,” Mostaque told TechCrunch in a previous interview. “We plan to use our compute to accelerate open source, foundational AI.”
- vasco 4y ago
  > We’re completely independent After taking $100 million of other people's money, were they born yesterday?
  - sytelus 4y ago
    New way of founding allows founders to retain 100% control. Facebook and Google are examples in their early years.
    - vasco 4y ago
      Owning voting shares is quite different from being independent. Investors had plenty of influence on those companies regardless of the founders setting up dual class shares. If you think a startup with investors operates the same way as one without, and that it can be independent the same way, I'm not sure what to say.
sixQuarks 4y ago
That didn't take long to sell out.
- keithwhor 4y ago
  How did you expect them to pay for the $50M in infrastructure and R&D costs spent on giving you and millions of developers worldwide access to their models for free?
  - sixQuarks 4y ago
    Is this comment supposed to be satire? Stable diffusion cost just $600,000 to model.
    - keithwhor 4y ago
      > Stability AI has a cluster of more than 4,000 Nvidia A100 GPUs running in AWS, which it uses to train AI systems, including Stable Diffusion. It’s quite costly to maintain — Business Insider reports that Stability AI’s operations and cloud expenditures exceeded $50 million. Directly from the article.
pclmulqdq 4y ago
On what business model exactly?
- elil17 4y ago
  According to the article, they plan to train private models. They claim to have done R&D that makes them more efficient at training models.
  - pclmulqdq 4y ago
    Does that sound like a $1 billion business to you? Even at 6 figure profit per model, they are going to need to build up a huge sales arm to do enough business for that valuation. I think they are expecting to become some sort of artist's tool, but since the model is open source and artist's tend to have good GPUs, Adobe can crush them by putting their own model (or a similar proprietary model from Adobe) into photoshop.
    - elil17 4y ago
      It does not at all. I agree with you.
    - qeternity 4y ago
      It does not imo but also seems like a cheap way to back a possibly asymmetric group. The valuation is not the hurdle for investors, as they will have seniority (likely with a multiplier) in any liquidity event. Does it seem like this group is moving quickly and making waves in a potentially huge market? Yes. Is this still a lot of money and very risky? Also yes.
- inawarminister 4y ago
  DreamStudio got one million users already, generating 17 million images. Granting that most people don't pay in (I got $2 credit for 200 generations by logging in), a $10/1000 images is still, ah, good enough I'd say. Especially if they stayed fresh by agglutinating all the advances in the open ecosystem.
yieldcrv 4y ago
This is the one that took over the community stable diffusion subreddit moderation from a kid right?
- astrange 4y ago
  And gave it back.
  - yieldcrv 4y ago
    Oh yeah? This space is moving fast
type4 4y ago
Makes the stalling on releasing 1.5 publicly more understandable. Hopefully they won't become the next "OpenAI" but the material incentives are not aligned with public releases.
- drawingthesun 4y ago
  Emad said on Twitter that this funding round completed 8 weeks ago and it was the last few weeks he has been stalling. For over a month after the funding round completed he was eager to release as much as he could, including 1.5 My read on the issue is that either of (or all) the following is causing some concern: 1. The severe pushback from artists regarding the fact that the model is trained on living artists artworks. 2. Almost every implementation removed the nudity filters. https://mobile.twitter.com/EMostaque/status/1582055542960230400 https://mobile.twitter.com/EMostaque/status/1582055542960230...
asicsp 4y ago
See also "Stability event happening now. News so far: Animation API next week, DreamStudio Pro in progress (automatic gen of video from music, latent space exploration) will fund 100 PHDs this year. Their cluster is 4000 A100s on AWS and wants to grow 5x-10x next year. will reduce by half price of Dreamstudio" https://old.reddit.com/r/StableDiffusion/comments/y6v0v9/stability_event_happening_now_news_so_far/ https://old.reddit.com/r/StableDiffusion/comments/y6v0v9/sta...
ansk 4y ago
I've spent the last half hour trying to figure out what this company is, and I still have no idea. My first stop was their website and I could not find a single sentence providing concrete details regarding their value proposition. It's just a bunch of vacuous statements which paint themselves as some sort of iconoclastic visionaries. Please do check it out for yourself and tell me it's not just a bunch of nonsense. For further evidence that this company hates concrete ideas and coherent sentences, head over to the founder's twitter and read his bio. Anyways, if you scroll past the hand waving on their site, the first thing they tout is their developer communities. What exactly is a developer community? Do these communities belong to Stability? Does Stability own the research/models produced by these communities? I don't understand the value of this section at all. It seems to be just a list of ill-defined and loosely connected organizations with no clear relation to Stability. Lastly, I am well aware of what stable diffusion is, but I still am not sure what the relationship is between Stability AI and the researchers that developed the stable diffusion model. As far as I can tell, Stability AI simply provided the compute for model training. None of the researchers list any affiliation with Stability in their publications (or elsewhere that I looked). And if this is the case, is there any reason to expect Stability to stay on the forefront of AI research? Or are they just going to open source models in the wake of actual research done by other organizations? How is lending compute to other researchers a viable business model, let alone one worth a 1B valuation? Is their stable diffusion API/Studio that much better than all the others? Are these investors reputable? My first impression would be that they are drastically overestimating the competitive edge that Stability has.
- wodenokoto 4y ago
  > I've spent the last half hour trying to figure out what this company is, and I still have no idea. My first stop was their website and I could not find a single sentence providing concrete details regarding their value proposition. As much as it sucks, they don't owe the general public an explanation of their business plan. They apparently have access to investors and can explain it to them directly. > but I still am not sure what the relationship is between Stability AI and the researchers that developed the stable diffusion model. Another post trending on HN today about data laundering says that Stable AI funds the university research behind Stable Diffusion. The data laundering comes from the university using otherwise copyrighted data for "research purposes" and Stable AI can in turn use the trained model commercially, sidestepping the fact that the underlying data is not available for commercial purposes. Another way to read that situation is simply that it is easier to outsource your research than build your own team.
nxmnxm99 4y ago
codeflo 4y ago
Stable Diffusion is simply fantastic, we live in great times to have such a thing as open-source to play with. And however justified the skepticism expressed in other HN comments might be, I truly hope they figure out a business model that’s compatible with continuing to make these releases. Otherwise, it’s forever going to be DeepMind’s “we actually have much better models, no you can’t see them, they go to a different school”, or alternatively, OpenAI’s insane prices and restrictions. For this field to become a game changer, the public needs access.
- mark_l_watson 4y ago
  Are OpenAI’s prices really “insane”? I have been using their GPT-3 based APIs for probably close to a year, and they seem really inexpensive compared to running a server myself with the required memory and compute, not to mention convenience. I am just starting to use some Hugging Face APIs, but so far I don’t have enough experience to talk about them.
sytelus 4y ago
This is quite stunning. OpenAI valuations are quoted as $3B. Stability AI just popped up6 months ago and is able to raise rounds in very tough economy at $1B valuation. The real differentiator between two is that Stability AI has took upon itself to o democratize AI ignoring all social wokness and thereby multiplying their efforts many manifold through community labor. OpenAI meanwhile is still deeply caught up in all kind of social/ethical/philosophical delima as well as Apple-isc secrecy as devotional offerings to Steve Jobs. With this level of funding and community following, Stability AI is en route to dethrone OpenAI in almost no time.
- newaccount2021 4y ago
  both numbers are total BS I'd love to see the SEC start requiring VCs to underwrite these idiotic "valuation" numbers...you say its worth $1 bln, you need to be prepared and required to potentially buy back pre-IPO shares from invested parties at that valuation now watch those values drop, rapidly did we not learn anything from Uber being "valued" at $150bln?
  - miohtama 4y ago
    The job of the SEC is not tell if a stock price is too low or too high. The SEC’s can only protect investors by ensuring companies do not lie. At the moment the SEC starts to decide something is too expensive then the stock market effectively becomes socialism. It should be everyone’s own resposibility to decide if they invest in something and also be prepared to take losses on that investing. There cannot be investing without the risk taking aspect. Whoever invested in Uber at too high valuation should bear the resposibility of losses of their investment.
- learndeeply 4y ago
  Microsoft invested $1B in OpenAI in 2019, the valuation is probably somewhere in the neighborhood of $5-20B.
  - hackerfromthefu 4y ago
    Wasn't that only in Azure credits or somesuch?
1B05H1N 4y ago
No idea what they do.
- mickael-kerjean 4y ago
  Taken from their website, they seem to have a range of products like: - eleutherai: A decentralised collective focusing on AI alignment - Laion: A community-driven non-profit organisation devoted to making large-scale AI openly accessible. - DreamStudio: Open-sourced image generation model that cultivates autonomous freedom to produce incredible imagery. - ... few more things with a bunch of nice words I can't make sense of like their coming soon DeepFloyd that is about "Discovering new facets of Multimodality." The only thing I could get that point to something concrete is the link to their github which was created end of August of this year from which they seem to claim: "Our vibrant communities consist of experts, leaders and partners across the globe. They are developing cutting-edge open AI models for Image, Language, Audio, Video, 3D and Biology"
htrp 4y ago
VCs just got fleeced.....
- rasz 4y ago
  Not if they can flip it to a bigger fool.
pjfin123 4y ago
They're leading the way with open source models, I wish them the best!
michael-go 4y ago
Video of the investment announcement event/keynote: https://youtu.be/1Uy_8YPWrXo https://youtu.be/1Uy_8YPWrXo

101 points by obiefernandez 4y ago

How does this change their organizational model now they have VC money? > “Nobody has any voting rights except our employees — no billionaires, big funds, governments or anyone else with control of the company or the communities we support. We’re completely independent,” Mostaque told TechCrunch in a previous interview. “We plan to use our compute to accelerate open source, foundational AI.”

vasco 4y ago
> We’re completely independent After taking $100 million of other people's money, were they born yesterday?
- sytelus 4y ago
  New way of founding allows founders to retain 100% control. Facebook and Google are examples in their early years.
  - vasco 4y ago
    Owning voting shares is quite different from being independent. Investors had plenty of influence on those companies regardless of the founders setting up dual class shares. If you think a startup with investors operates the same way as one without, and that it can be independent the same way, I'm not sure what to say.

sixQuarks 4y ago

That didn't take long to sell out.

keithwhor 4y ago
How did you expect them to pay for the $50M in infrastructure and R&D costs spent on giving you and millions of developers worldwide access to their models for free?
- sixQuarks 4y ago
  Is this comment supposed to be satire? Stable diffusion cost just $600,000 to model.
  - keithwhor 4y ago
    > Stability AI has a cluster of more than 4,000 Nvidia A100 GPUs running in AWS, which it uses to train AI systems, including Stable Diffusion. It’s quite costly to maintain — Business Insider reports that Stability AI’s operations and cloud expenditures exceeded $50 million. Directly from the article.

pclmulqdq 4y ago

On what business model exactly?

elil17 4y ago
According to the article, they plan to train private models. They claim to have done R&D that makes them more efficient at training models.
- pclmulqdq 4y ago
  Does that sound like a $1 billion business to you? Even at 6 figure profit per model, they are going to need to build up a huge sales arm to do enough business for that valuation. I think they are expecting to become some sort of artist's tool, but since the model is open source and artist's tend to have good GPUs, Adobe can crush them by putting their own model (or a similar proprietary model from Adobe) into photoshop.
  - elil17 4y ago
    It does not at all. I agree with you.
  - qeternity 4y ago
    It does not imo but also seems like a cheap way to back a possibly asymmetric group. The valuation is not the hurdle for investors, as they will have seniority (likely with a multiplier) in any liquidity event. Does it seem like this group is moving quickly and making waves in a potentially huge market? Yes. Is this still a lot of money and very risky? Also yes.
inawarminister 4y ago
DreamStudio got one million users already, generating 17 million images. Granting that most people don't pay in (I got $2 credit for 200 generations by logging in), a $10/1000 images is still, ah, good enough I'd say. Especially if they stayed fresh by agglutinating all the advances in the open ecosystem.

yieldcrv 4y ago

This is the one that took over the community stable diffusion subreddit moderation from a kid right?

astrange 4y ago
And gave it back.
- yieldcrv 4y ago
  Oh yeah? This space is moving fast

type4 4y ago

Makes the stalling on releasing 1.5 publicly more understandable. Hopefully they won't become the next "OpenAI" but the material incentives are not aligned with public releases.

drawingthesun 4y ago
Emad said on Twitter that this funding round completed 8 weeks ago and it was the last few weeks he has been stalling. For over a month after the funding round completed he was eager to release as much as he could, including 1.5 My read on the issue is that either of (or all) the following is causing some concern: 1. The severe pushback from artists regarding the fact that the model is trained on living artists artworks. 2. Almost every implementation removed the nudity filters. https://mobile.twitter.com/EMostaque/status/1582055542960230400 https://mobile.twitter.com/EMostaque/status/1582055542960230...

asicsp 4y ago

See also "Stability event happening now. News so far: Animation API next week, DreamStudio Pro in progress (automatic gen of video from music, latent space exploration) will fund 100 PHDs this year. Their cluster is 4000 A100s on AWS and wants to grow 5x-10x next year. will reduce by half price of Dreamstudio" https://old.reddit.com/r/StableDiffusion/comments/y6v0v9/stability_event_happening_now_news_so_far/ https://old.reddit.com/r/StableDiffusion/comments/y6v0v9/sta...

ansk 4y ago

I've spent the last half hour trying to figure out what this company is, and I still have no idea. My first stop was their website and I could not find a single sentence providing concrete details regarding their value proposition. It's just a bunch of vacuous statements which paint themselves as some sort of iconoclastic visionaries. Please do check it out for yourself and tell me it's not just a bunch of nonsense. For further evidence that this company hates concrete ideas and coherent sentences, head over to the founder's twitter and read his bio. Anyways, if you scroll past the hand waving on their site, the first thing they tout is their developer communities. What exactly is a developer community? Do these communities belong to Stability? Does Stability own the research/models produced by these communities? I don't understand the value of this section at all. It seems to be just a list of ill-defined and loosely connected organizations with no clear relation to Stability. Lastly, I am well aware of what stable diffusion is, but I still am not sure what the relationship is between Stability AI and the researchers that developed the stable diffusion model. As far as I can tell, Stability AI simply provided the compute for model training. None of the researchers list any affiliation with Stability in their publications (or elsewhere that I looked). And if this is the case, is there any reason to expect Stability to stay on the forefront of AI research? Or are they just going to open source models in the wake of actual research done by other organizations? How is lending compute to other researchers a viable business model, let alone one worth a 1B valuation? Is their stable diffusion API/Studio that much better than all the others? Are these investors reputable? My first impression would be that they are drastically overestimating the competitive edge that Stability has.

wodenokoto 4y ago
> I've spent the last half hour trying to figure out what this company is, and I still have no idea. My first stop was their website and I could not find a single sentence providing concrete details regarding their value proposition. As much as it sucks, they don't owe the general public an explanation of their business plan. They apparently have access to investors and can explain it to them directly. > but I still am not sure what the relationship is between Stability AI and the researchers that developed the stable diffusion model. Another post trending on HN today about data laundering says that Stable AI funds the university research behind Stable Diffusion. The data laundering comes from the university using otherwise copyrighted data for "research purposes" and Stable AI can in turn use the trained model commercially, sidestepping the fact that the underlying data is not available for commercial purposes. Another way to read that situation is simply that it is easier to outsource your research than build your own team.

nxmnxm99 4y ago

codeflo 4y ago

Stable Diffusion is simply fantastic, we live in great times to have such a thing as open-source to play with. And however justified the skepticism expressed in other HN comments might be, I truly hope they figure out a business model that’s compatible with continuing to make these releases. Otherwise, it’s forever going to be DeepMind’s “we actually have much better models, no you can’t see them, they go to a different school”, or alternatively, OpenAI’s insane prices and restrictions. For this field to become a game changer, the public needs access.

mark_l_watson 4y ago
Are OpenAI’s prices really “insane”? I have been using their GPT-3 based APIs for probably close to a year, and they seem really inexpensive compared to running a server myself with the required memory and compute, not to mention convenience. I am just starting to use some Hugging Face APIs, but so far I don’t have enough experience to talk about them.

sytelus 4y ago

This is quite stunning. OpenAI valuations are quoted as $3B. Stability AI just popped up6 months ago and is able to raise rounds in very tough economy at $1B valuation. The real differentiator between two is that Stability AI has took upon itself to o democratize AI ignoring all social wokness and thereby multiplying their efforts many manifold through community labor. OpenAI meanwhile is still deeply caught up in all kind of social/ethical/philosophical delima as well as Apple-isc secrecy as devotional offerings to Steve Jobs. With this level of funding and community following, Stability AI is en route to dethrone OpenAI in almost no time.

newaccount2021 4y ago
both numbers are total BS I'd love to see the SEC start requiring VCs to underwrite these idiotic "valuation" numbers...you say its worth $1 bln, you need to be prepared and required to potentially buy back pre-IPO shares from invested parties at that valuation now watch those values drop, rapidly did we not learn anything from Uber being "valued" at $150bln?
- miohtama 4y ago
  The job of the SEC is not tell if a stock price is too low or too high. The SEC’s can only protect investors by ensuring companies do not lie. At the moment the SEC starts to decide something is too expensive then the stock market effectively becomes socialism. It should be everyone’s own resposibility to decide if they invest in something and also be prepared to take losses on that investing. There cannot be investing without the risk taking aspect. Whoever invested in Uber at too high valuation should bear the resposibility of losses of their investment.
learndeeply 4y ago
Microsoft invested $1B in OpenAI in 2019, the valuation is probably somewhere in the neighborhood of $5-20B.
- hackerfromthefu 4y ago
  Wasn't that only in Azure credits or somesuch?

1B05H1N 4y ago

No idea what they do.

mickael-kerjean 4y ago
Taken from their website, they seem to have a range of products like: - eleutherai: A decentralised collective focusing on AI alignment - Laion: A community-driven non-profit organisation devoted to making large-scale AI openly accessible. - DreamStudio: Open-sourced image generation model that cultivates autonomous freedom to produce incredible imagery. - ... few more things with a bunch of nice words I can't make sense of like their coming soon DeepFloyd that is about "Discovering new facets of Multimodality." The only thing I could get that point to something concrete is the link to their github which was created end of August of this year from which they seem to claim: "Our vibrant communities consist of experts, leaders and partners across the globe. They are developing cutting-edge open AI models for Image, Language, Audio, Video, 3D and Biology"

htrp 4y ago

VCs just got fleeced.....

rasz 4y ago
Not if they can flip it to a bigger fool.

pjfin123 4y ago

They're leading the way with open source models, I wish them the best!

michael-go 4y ago

Video of the investment announcement event/keynote: https://youtu.be/1Uy_8YPWrXo https://youtu.be/1Uy_8YPWrXo