https://www.theregister.com/2024/04/03/stability_ai_bills/ # # Sign in / up The Register(r) -- Biting the hand that feeds IT # # # Topics Security Security All SecurityCyber-crimePatchesResearchCSO (X) Off-Prem Off-Prem All Off-PremEdge + IoTChannelPaaS + IaaSSaaS (X) On-Prem On-Prem All On-PremSystemsStorageNetworksHPCPersonal TechCxOPublic Sector (X) Software Software All SoftwareAI + MLApplicationsDatabasesDevOpsOSesVirtualization (X) Offbeat Offbeat All OffbeatDebatesColumnistsScienceGeek's GuideBOFHLegalBootnotesSite NewsAbout Us (X) Special Features Special Features All Special Features Cloud Infrastructure Week Cybersecurity Month Blackhat and DEF CON Sysadmin Month The Reg in Space Emerging Clean Energy Tech Week Spotlight on RSA Energy Efficient Datacenters Vendor Voice Vendor Voice Vendor Voice All Vendor Voice Amazon Web Services (AWS) Business Transformation Amazon Web Services (AWS) New Horizon in Cloud Computing DDN Google Cloud Data Transformation Hewlett Packard Enterprise: AI & ML solutions Hewlett Packard Enterprise: Edge-to-Cloud Platform Intel vPro VMware (X) Resources Resources Whitepapers Webinars & Events Newsletters [aiml] AI + ML 19 comment bubble on white Stability AI reportedly ran out of cash to pay its bills for rented cloudy GPUs 19 comment bubble on white Generative AI darling was on track to pay $99M on compute to generate just $11M in revenues icon Tobias Mann Wed 3 Apr 2024 // 00:16 UTC # The massive GPU clusters needed to train Stability AI's popular text-to-image generation model Stable Diffusion are apparently also at least partially responsible for former CEO Emad Mostaque's downfall - because he couldn't find a way to pay for them. According to an extensive expose citing company documents and dozens of persons familiar with the matter, it's indicated that the British model builder's extreme infrastructure costs drained its coffers, leaving the biz with just $4 million in reserve by last October. Stability rented its infrastructure from Amazon Web Services, Google Cloud Platform, and GPU-centric cloud operator CoreWeave, at a reported cost of around $99 million a year. That's on top of the $54 million in wages and operating expenses required to keep the AI upstart afloat. [aiml] What's more, it appears that a sizable portion of the cloudy resources Stability AI paid for were being given away to anyone outside the startup interested in experimenting with Stability's models. One external researcher cited in the report estimated that a now-cancelled project was provided with at least $2.5 million worth of compute over the span of four months. [aiml] [aiml] Stability AI's infrastructure spending was not matched by revenue or fresh funding. The startup was projected to make just $11 million in sales for the 2023 calendar year. Its financials were apparently so bad that it allegedly underpaid its July 2023 bills to AWS by $1 million and had no intention of paying its August bill for $7 million. Google Cloud and CoreWeave were also not paid in full, with debts to the pair reaching $1.6 million as of October, it's reported. [aiml] It's not clear whether those bills were ultimately paid, but it's reported that the company - once valued at a billion dollars - weighed delaying tax payments to the UK government rather than skimping on its American payroll and risking legal penalties. The failing was pinned on Mostaque's inability to devise and execute a viable business plan. The company also failed to land deals with clients including Canva, NightCafe, Tome, and the Singaporean government, which contemplated a custom model, the report asserts. Stability's financial predicament spiraled, eroding trust among investors, making it difficult for the generative AI darling to raise additional capital, it is claimed. According to the report, Mostaque hoped to bring in a $95 million lifeline at the end of last year, but only managed to bring in $50 million from Intel. Only $20 million of that sum was disbursed, a significant shortfall given that the processor titan has a vested interest in Stability, with the AI biz slated to be a key customer for a supercomputer powered by 4,000 of its Gaudi2 accelerators. [aiml] Intel's smaller than expected investment wasn't the only fundraising effort to fall short. In July 2023 Mostaque reportedly pushed a fundraising plan that sought to bring in $500 million in cash plus $750 million in computing facilities from the likes of Nvidia, Google, and Intel. These plans quickly fell apart, with Forbes pointing to an alleged meeting between Mostaque and Nvidia CEO Jensen Huang that ended disastrously. Mostaque, for his part, has denied any such meeting ever happened. By late 2023, venture capital outfit Lightspeed had reportedly raised alarm bells expressing its shock after discovering the poor state of Stability's cash flow, which apparently had not previously been disclosed. The VC firm also urged Stability's board to sell the floundering business. But, despite reports the AI developer was shopping around for a buyer, a sale never happened. By December, the startup had pivoted to a subscription model for commercial use of Stable Diffusion with prices starting at $20 per month. However, behind the scenes, Stability was said to be weighing another strategy for propping up revenues: Reselling its compute resources as a managed service. The plan was apparently to resell Stability's GPU debt, which could have brought in $139 million in 2024 -- assuming doing so didn't violate its contract with AWS. Similar plans were said to have been drawn up to resell its GPU capacity at CoreWeave to VC firm Andreessen Horowitz. * DARPA AI research aims to craft code that could give devs the boot * Getty's image-scraping sueball against Stability AI will go to trial in the UK * Why Microsoft's Copilot will only kinda run locally on AI PCs for now * AI copyright row deepens: Stability VP quits in protest over 'fair use' excuse Making matters worse, Stability was also having a hard time retaining staff, it is claimed. In November, Ed Newton-Rex, who was heading up development of a text-to-audio model, resigned in protest over arguments made by the biz that training on copyrighted material constituted fair use. Last month, Stability waved goodbye to several key researchers behind the development of its hallmark model Stable Diffusion. The situation came to a head late last month when Mostaque revealed on social media he had resigned stating that "the concentration of power in AI is bad for us all," and that in order to address it he had "decided to step down to fix this at Stability and elsewhere." Today, Stability AI is under new management with COO Shan Shan Wong and CTO Christian Laforte currently serving as interim co-CEOs until the position can be filled on a more permanent basis. Despite the change in leadership, Stability's future remains uncertain. Even if the biz manages to turn its financials around, it's still facing down multiple copyright infringement cases brought by Getty and other artists, who allege their works were used without permission to train its signature model. (r) Get our Tech Resources # Share More about * AI * AWS * Datacenter More like these x More about * AI * AWS * Datacenter * Google Cloud Platform * GPU Narrower topics * Apple M1 * AWS Graviton * Disaster recovery * EC2 * Gemini * Google AI * Google Cloud Next * GPT-3 * GPT-4 * GTC * Large Language Model * Machine Learning * MCubed * Neural Networks * NLP * Open Compute Project * PUE * S3 * Software defined data center * Star Wars * Tensor Processing Unit Broader topics * Alder Lake * Amazon * Cloud Computing * Google * Hardware * Jeff Bezos * Self-driving Car More about # Share 19 comment bubble on white COMMENTS More about * AI * AWS * Datacenter More like these x More about * AI * AWS * Datacenter * Google Cloud Platform * GPU Narrower topics * Apple M1 * AWS Graviton * Disaster recovery * EC2 * Gemini * Google AI * Google Cloud Next * GPT-3 * GPT-4 * GTC * Large Language Model * Machine Learning * MCubed * Neural Networks * NLP * Open Compute Project * PUE * S3 * Software defined data center * Star Wars * Tensor Processing Unit Broader topics * Alder Lake * Amazon * Cloud Computing * Google * Hardware * Jeff Bezos * Self-driving Car TIP US OFF Send us news --------------------------------------------------------------------- Other stories you might like AI bubble or not, Nvidia is betting everything on a GPU-accelerated future Comment LLMs powering generative AI may be moving GPUs, but Huang and co already looking at next big opportunity Systems25 Mar 2024 | 7 Amazon to lure upstarts with $500K in AWS AI credits each Come on in, drill into Anthropic and Mistral - that's not the sound of a door slamming shut behind you AI + ML2 Apr 2024 | 1 Nvidia turns up the AI heat with 1,200W Blackwell GPUs Five times the performance of the H100, but you'll need liquid cooling to tame the beast Systems18 Mar 2024 | 17 Developing AI workloads is complex. Deciding where to run them might be easier How Digital Realty is powering AI in the UK Sponsored Feature [aiml] What Nvidia's Blackwell efficiency gains mean for DC operators Analysis Air cooling's diminishing returns on full display with Nv's B-series silicon Systems27 Mar 2024 | 4 Nvidia software exec Kari Briski on NIM, CUDA, and dogfooding AI Interview A RAGs to riches story AI + ML26 Mar 2024 | Amazon finishes pumping $4B into AI darling Anthropic Adds $2.75B to the ML sweepstakes ante and is counting on Claude AI + ML27 Mar 2024 | 3 One rack. 120kW of compute. Taking a closer look at Nvidia's DGX GB200 NVL72 beast GTC 1.44 exaFLOPs of FP4, 13.5 TB of HBM3e, 2 miles of NVLink cables, in one liquid cooled unit Systems21 Mar 2024 | 22 Nvidia: Why write code when you can string together a couple chat bots? GPU giant says NIM will eliminate dependency headaches for the low low cost of $4,500/year per GPU Systems19 Mar 2024 | 14 Microsoft rolls out safety tools for Azure AI. Hint: More models Defenses against prompt injection, hallucination arrive as Feds eye ML risks AI + ML29 Mar 2024 | 10 As AI booms, land near nuclear power plants becomes hot real estate Cheap low-carbon energy? What's not to love... Systems25 Mar 2024 | 54 Microsoft, OpenAI may be dreaming of $100B 5GW AI 'Stargate' supercomputer Play it again, Sam AI + ML1 Apr 2024 | 31 The Register icon Biting the hand that feeds IT About Us* * Contact us * Advertise with us * Who we are Our Websites* * The Next Platform * DevClass * Blocks and Files Your Privacy* * Cookies Policy * Privacy Policy * Ts & Cs * Do not sell my personal information Situation Publishing Copyright. All rights reserved (c) 1998-2024 no-js