Stability AI is collapsing

Stability AI, the once-promising British AI startup behind the groundbreaking Stable Diffusion image model, appears to be on the brink of collapse. According to reports, the company has been losing key talent including its former CEO, Emad Mostaque since March.

A few days ago, the developer of ComfyUI, who also helped train some versions of SD3 left Stability. The departure was confirmed after Comfy posted the chat below on Discord.

Comfy joined other talented people like mcmonkey4eva and Dr.Lt.Data to build a new company called Comfy Org that aims to advance and democratize AI tooling.

Open source AI model will win over the long run against closed models and we are at the beginning of it. Yet if open source models can only be utilized by a handful of cloud providers or closed sourced tools, is AI truly democratized? Our core mission is to advance and democratize AI tooling. We believe that the future of AI tooling is open-source and community-driven.

Stability AI Gets a New CEO

Stability announced Prem Akkaraju as its new CEO.

Akkaraju, who previously led the visual effects giant Weta Digital, steps into the role after Chief Operating Officer Shan Shan Wong and Chief Technology Officer Christian Laforte had been running the company in the interim.

The leadership change is part of a bigger plan to fix the company’s financial problems and internal struggles.

So, what happened?

The company is facing serious financial issues.

It made less than $5 million in the first part of 2024 and lost over $30 million while owing nearly $100 million to various creditors. This financial strain led to job cuts, with 10% of the staff being laid off, and several key team members leaving the company.

Stability AI also faced backlash for its latest product, Stable Diffusion 3 (SD3), due to a new licensing model that restricts how users can use the software, moving away from the company’s previous open-source policy.

Aside from the strange licensing, the SD3 2B is a degrade from the previous model. Take a look at these images of a girl lying on the grass.

These images are a disaster.

CivitAI, the popular platform for AI models, banned SD3 due to a lack of clarity in the license.

Absurd Licensing Terms

Stability AI’s new “Creator’s License” for their SD3 model is causing a massive uproar from users, and frankly, it’s no wonder why. Let’s break it down:

First off, they’re charging $20 a month for creators and developers to use the model, even if you’re running it on your own computer!

They’re also limiting users to 6,000 images per month.

Does it mean, that even if you’re a company with, say, 500,000 active users, you’re still stuck with that same 6,000 image limit? That’s ridiculous.

The license also has some pretty weird policies about “derivative works.” Basically, any tweaks or modifications you make to the model fall under their control. What happens to all the fine-tuned models then? Is it still safe to create a custom model out of SD3?

There’s more. If your license ends for any reason — even if you just can’t afford it anymore — you have to destroy everything you’ve made with SD3 including trained models and their outputs.

To top it all off, SD3 isn’t even that great yet. It’s still making tons of mistakes and doesn’t perform as well as older models. So they’re asking for all this control over a product that isn’t even fully baked.

Community Reaction

The reaction from the community has been largely negative, with many voicing their frustrations across social media platforms.

“It works fine as long as there are no humans in the picture. I think their improved NSFW filter for filtering training data decided anything humanoid is NSFW,” wrote a Redditor.

Stability AI has responded to some of these concerns by providing clarifications and updates to their licensing terms. However, the core issues of complexity and restriction remain, leading to ongoing dissatisfaction among users.

Despite the updated terms, CivitAI still bans SD3 from its platform because the licensing is still unclear.

What does this mean for SD3 on Civitai?

Unfortunately this means that for the time being SD3 will remain banned.

Even if you assume no potential for future misuse on the license holders part, given that Civitai is actively committed to helping creators monetize their work, it would be severely irresponsible of us to promote this model with the license as is.

Final Thoughts

The situation at Stability AI reflects the broader tension in the AI industry between openness and commercialization. While profit-driven motives can fuel innovation and sustainability, they can also conflict with the collaborative spirit that has driven much of AI’s rapid progress.

I sincerely hope that Stability AI can find a way to return to its roots, balancing commercial viability with its original commitment to open-source innovation.

Stable Diffusion 3 2B is a terrible image model. How can they even gain profit with such a bad product?

Despite these setbacks, Stable Diffusion remains a key image model for various LoRAs. Also, the 8B could be miles better than the 2B model, so I am waiting for Stability to release this new model and, hopefully, a revised content policy.

‍