Stability AI in FREEFALL! Why Stable Diffusion 3 Weights Might Not be Released & Emad Talks

Ai Flux
16 May 202416:11

TLDRStability AI, once a beacon of hope for open-source AI development, is now facing financial turmoil and potential bankruptcy. The company, known for its groundbreaking model Stable Diffusion, has struggled with profitability and internal disputes. Despite setbacks, there's optimism for the release of Stable Diffusion 3, with partnerships hinting at its use in on-device inference, possibly saving the company's legacy in open-source AI innovation.


  • 😲 In 2023, AI was becoming more prominent, but many people were still unfamiliar with its capabilities beyond basic applications like Google's search improvements.
  • 🤖 The foundations of today's AI algorithms were established in the 1960s and '70s, and by 2023, advancements allowed for the creation of impressive large language models.
  • 🌟 Stability AI emerged as a beacon of hope, demonstrating that smaller companies could compete with larger entities by releasing the innovative model, Stable Diffusion.
  • 💡 Stable Diffusion was celebrated for its ability to allow users fine-tune control and run models on their own GPUs without restrictions on prompts or usage.
  • 🔄 However, Stability AI faced challenges in profitability and internal disputes, with accusations of financial mismanagement and copyright issues.
  • 🚀 Despite setbacks, Stability AI made significant contributions to AI research, including advancements in text-to-speech and text-to-video models.
  • 💸 Financial troubles led to Stability AI considering bankruptcy protection and seeking a buyer, highlighting the risks of relying on rented GPUs and unproven business models.
  • 🤝 A partnership with argmax suggests potential for Stable Diffusion 3 to be used in on-device inference, particularly for Apple's silicon devices, offering a glimmer of hope for the model's future.
  • 🔮 Emad, Stability AI's former CEO, has moved on to crypto projects, but his influence and voting power within the company may still affect its direction and open-source commitments.
  • 📉 The company's financial struggles and the uncertainty around the release of Stable Diffusion 3's weights raise questions about the future of open-source AI models in the industry.
  • 🔍 The video transcript underscores the complex and often tumultuous journey of AI startups and the challenges they face in navigating the competitive and financially demanding landscape of AI development.

Q & A

  • What was the significance of Stable Diffusion in the AI industry in 2023?

    -Stable Diffusion was significant because it demonstrated that a company without billions of dollars could create a model that competes with larger companies. It represented a beacon of hope that the progress and future of AI would not be monopolized by big tech, and it was known for its fine-tune control and the ability to run on personal GPUs without the need for paying for each image generated.

  • What challenges has Stability AI faced in the last six months?

    -Stability AI has faced challenges with profitability, key members departing the organization, accusations of financial mishandling by Emad MTO, and questions regarding compliance with U.S. copyright law. There are also concerns about the licensing of the model and the ownership of images created by it.

  • What is the current status of Stability AI as discussed in the script?

    -As of the script's discussion, Stability AI is in financial distress, considering bankruptcy protection, and is reportedly discussing a sale due to a cash crunch. They have nearly spent $250 million on research and training without developing a profitable business model.

  • What is the potential significance of the partnership between Stability AI and Argmax?

    -The partnership with Argmax is significant because Argmax is working on on-device inference for large language models and generative AI. They plan to bring Stable Diffusion 3 to Mac using MLX, optimize memory consumption and latency, and open source the project alongside Stability AI's upcoming open weights release, which could potentially save Stability AI.

  • What is Emad's current involvement with Stability AI and his focus on crypto projects?

    -Emad has departed from major leadership at Stability AI and is no longer the CEO. However, he is still on the board and has a significant number of votes. He is currently focusing on various crypto projects, and there seems to be some overlap with Stability AI's endeavors.

  • What is the Render Project and how might it relate to Stability AI?

    -The Render Project is a distributed GPU cloud that uses an Ethereum token for payment, primarily rendering Octane for iPad apps. Stability AI might be partnering with them to utilize their network of GPUs, as Stability AI has always rented GPUs and does not own many.

  • What is the potential impact of Stability AI's financial issues on the open-source AI community?

    -The financial issues of Stability AI could potentially impact the open-source AI community by limiting the availability of open-source image generation base models. If Stability AI is unable to continue operations, it could affect the accessibility and development of such models.

  • What are some of the innovative projects that Stability AI has funded in the past?

    -Stability AI has funded projects that have shown promise and yielded results, such as models that use large language models to supercharge protein modeling and folding. These projects have demonstrated impressive discoveries in their respective fields.

  • What is the current status of Stable Diffusion 3 and its potential release?

    -Stable Diffusion 3 is running in production to some extent, and there are partnerships that claim to be using it. Despite Stability AI's financial struggles, there is hope that the open weights for Stable Diffusion 3 will be released, possibly through partnerships like the one with Argmax.

  • What are some of the concerns regarding the business model and monetization of AI models like Stable Diffusion?

    -Concerns include the difficulty of creating a profitable business model around AI models, the challenge of monetizing the models without restricting user access, and the balance between offering a free service to attract users and operating at a loss to gain investment.



🚀 The Rise and Challenges of Stability AI

This paragraph introduces the backdrop of the AI Revolution in 2023, highlighting the public's limited understanding of AI and the emergence of large language models that surpassed expectations. It discusses the early days of Stability AI and its groundbreaking model, Stable Diffusion, which demonstrated that a company without massive funding could compete with tech giants. The paragraph also touches on the controversies and challenges Stability AI faced, including financial mismanagement, departure of key members, and questions about copyright law compliance, leading to a shift in the company's status from a promising startup to one grappling with financial and operational difficulties.


📉 Stability AI's Financial Struggles and Potential Future

The second paragraph delves into the financial struggles of Stability AI, discussing the company's spending on research and training without yielding a profitable business model. It mentions the company's attempt to mimic Mid Journey's business model and the slow-motion failure characterized by copying Mid Journey's approach to a Discord bot. The paragraph speculates on potential buyers for Stability AI's assets, particularly the anticipated Stable Diffusion 3, and introduces a partnership with Argmax, a company specializing in on-device inference for generative AI, suggesting a possible lifeline for Stability AI through this collaboration.


🤔 The Speculations Surrounding Stability AI's Partnerships and Future Models

This paragraph explores the potential implications of Stability AI's partnership with Argmax and the Render Network, speculating on the financial and operational aspects of these relationships. It discusses the possibility of Stability AI using the Render Network's GPU resources and the potential acquisition of Stability AI by Argmax, given the latter's interest in Stable Diffusion 3. The paragraph also touches on Emad's departure from active involvement in Stability AI and his focus on crypto projects, while hinting at the company's commitment to open-source models despite the challenges.


🌐 The Impact of Stability AI's Situation on the AI Industry

The final paragraph reflects on the potential impact of Stability AI's situation on the AI industry, particularly on open-source image generation models. It raises questions about the future of Stability AI as an entity and the implications of its potential acquisition by tech giants or smaller companies like Argmax. The paragraph also invites viewers to share their thoughts on the use of Stable Diffusion and its importance to the generative AI space, acknowledging the controversial yet significant role Stability AI has played in advancing AI technology and sparking interest in the field.



💡Stability AI

Stability AI is a company known for its open-source generative AI models, such as Stable Diffusion. The video discusses its rise as a prominent player in the AI industry, its financial struggles, and potential bankruptcy. Stability AI's commitment to open-source models and challenges with profitability are central themes.

💡Stable Diffusion

Stable Diffusion is an AI model developed by Stability AI, used for generating images. It stands out for being open-source and accessible to those without extensive resources. The video highlights its role in the AI community, the excitement around its releases, and the uncertainty about the future of its latest version, Stable Diffusion 3.

💡Emad Mostaque

Emad Mostaque is the founder of Stability AI. The video mentions his leadership and financial management issues within the company, his departure from the CEO role, and his continued influence through board votes. Emad's involvement in crypto projects is also discussed.

💡AI Revolution

The AI Revolution refers to the rapid advancements and increased adoption of artificial intelligence technologies starting around 2023. The video sets the context by explaining how AI evolved from basic machine learning applications to powerful models like large language models and generative tools, including those developed by Stability AI.


Open-source refers to software whose source code is available for anyone to inspect, modify, and enhance. Stability AI's commitment to open-source principles is a major theme in the video, contrasting it with more closed approaches by companies like OpenAI. The potential impact of Stability AI's financial issues on the open-source community is also discussed.

💡Generative AI

Generative AI involves creating new content, such as images, text, or videos, using artificial intelligence. Stable Diffusion is an example of a generative AI model. The video explores the capabilities and impact of generative AI, including recent advancements and challenges faced by Stability AI in this field.

💡Large language models

Large language models are advanced AI systems capable of understanding and generating human-like text. The video mentions their development as a key milestone in the AI Revolution of 2023. These models, including those created by Stability AI, represent significant technological advancements and are used in various applications.

💡Financial struggles

Financial struggles refer to the economic difficulties faced by Stability AI, including challenges with profitability, high operational costs, and cash shortages. The video details how these issues have led to key personnel departures, potential bankruptcy, and efforts to find a buyer or new funding sources.


Argmax is a company mentioned in the video as partnering with Stability AI to bring Stable Diffusion 3 to Apple devices. The video suggests that this partnership might be a last-ditch effort to save Stability AI and speculates about Argmax potentially acquiring Stability AI due to their collaboration.


A GPU (Graphics Processing Unit) is a specialized processor used to accelerate computing tasks, especially those related to rendering images and training AI models. The video discusses how Stability AI's reliance on rented GPUs contributed to its financial problems and the potential benefits of owning GPUs for AI projects.


In 2023, AI Revolution began with large language models that were more impressive than any chatbot seen in the last decade.

Stable Diffusion was a model by Stability AI that showed a company without millions could compete with large tech companies.

Stability AI faced challenges with profitability and departure of key members, raising questions about financial mismanagement and adherence to US copyright law.

Stable Diffusion offered fine-tune control and did not restrict users with prompts or word limitations.

Stability AI expanded beyond images, making progress in text-to-speech models and even text-to-video workflows.

Stability AI once had a surplus of GPUs and funds, which they used to fund other promising projects.

Stability AI is now discussing a sale and considering bankruptcy protection due to a cash crunch.

Argmax, a company specializing in on-device inference for large models, announced a partnership with Stability AI for on-device inference of Stable Diffusion 3.

Argmax aims to bring Stable Diffusion 3 to Mac using MLX and Core ML, optimizing memory consumption and latency.

There is speculation that Argmax might acquire Stability AI due to their partnership and use of Stable Diffusion 3.

Emad, former CEO of Stability AI, is now working on crypto projects but still holds a significant number of votes on the board.

Stability AI's business model has yet to yield profit, even after copying Mid Journey's model.

Stable Diffusion 3 is rumored to be more efficient but still costs a lot for Stability AI to run.

Emad believes that the future of video generation models will involve 3D data generated by AI.

The future of Stability AI is uncertain, with potential outcomes including acquisition by tech giants or smaller companies like Argmax.