[capableweb]

The model was initially released in August 22, 2022, and everything from the GitHub organization that hosted the code, to the actual licenses being around and all the communication made it very clear that there was a bunch of groups involved with the model; Runway, CompVis, and Stability AI

Then Stability AI raised money from investors in October 2022.

Are you really telling me these investors didn't even do any sort of due diligence (not even "barely any" but literally any at all), didn't realized that Stable Diffusion was the work of many, and checked the license of the model and code?

That's a bit far fetched, to be honest.

Supposedly, this "leaked pitch deck" is supposed to show us that they lied to investors, but where is the pitch deck itself? Seemingly, only one of the slides is in the article, how could anyone reach any sort of conclusion based on just one slide?

Edit: The article seems to be some sort of clickbait trash that is so rampant around the web... One selected part:

> The Stable Diffusion code was released by researchers at LMU Munich in April 2022.

Links to https://arxiv.org/abs/2112.10752 which is the Version 2 of the paper, indeed released in April 2022. However, that paper is about, and links to https://github.com/CompVis/latent-diffusion which is not Stable Diffusion, it's Latent Diffusion. Stable Diffusion was released in August 2022, and is at https://github.com/CompVis/stable-diffusion

[algo_trader]

My pet theory is that Stability was a surprise viral hit during aug/sep. Then got a massive capital round. And NOW, growth is already slowing and investors are getting buyers-remorse?

Or maybe growth is accelerating, and those who passed on series-A are upset?

Or maybe the lizard men are involved?

[anonylizard]

Stability never had any revenue, nor any easy ways to measure their user base. Their 'growth' is basically dependant on them being able to release open source models that get so popular, unbeatable ecosystems get formed around them.

On this front. SD1.4/1.5 is extremely successful, but there has been no followup. SD2.0 was a total disaster that shocked the community, SD2.1 is still no better than SD1.5. StableLM currently is still a joke in performance. Like, they don't seem to even test their models before releasing them.

Compare their releases, to the polished and immediately dominant releases from OpenAI, and you have to question their researching chops. Did they only succeed with SD1.4 because of collaboration with other companies?

[emadm]

Stability AI is 18 months old so far and has spent 100x less than OpenAI which was founded in 2015.

I think it unreasonable to compare at this stage, we are still early as a company and organisation.

We have revenue (to be announced) but release models differently as we are not proprietary.

The numbers in that deck were as reported on models developed by team members (we chose not to assert IP rights) in use by various applications.

We were exploring co-creation full stack at that point, now we are focusing on base open models with commercially licensed variants.

[mountainriver]

That’s a fair point, and what Stability has given the ecosystem has been amazing, I’m rooting for them as they are one of the only orgs left that is still committed to open source

[capableweb]

> Stability never had any revenue, nor any easy ways to measure their user base

They do, for the products they have/will have. Right now, I think it's only DreamStudio, but like any SaaS product, they can and surely do measure the amount of users, and trivial for them to see the revenue.

What you're talking about, the models they help release, are not products themselves, more like research output they give away for free. Probably in order to drive users to their paid products.

[anonylizard]

Dreamstudio is a joke, not intended to be a serious product, but merely for someone to try out SD in under a minute.

99.9% of SD usage happens outside of Dreamstudio. The power of SD comes from using fine-tuned models, and dreamstudio doesn't allow that (For copyright reasons presumably). There are websites like happyaccidents that do allow using fine-tunes, because they are willing to shoulder the massive legal risk as smaller startups.

SD's primary business model was always intended to sign up corporate clients in a semi-LLM-consulting/support role for their open sourced models. Like Redhat in a way. And to succeed in that space, you need massive name recognition.

[capableweb]

As someone who develops software using Stable Diffusion and gets sold for money, I'm well aware how simple Dreamstudio is. No professional would use it. Doesn't mean they are not developing it to be a real product, that they'll try to get people to buy for real money.

[emadm]

The strategy was not DreamStudio but variant open models for private data.

We will be open sourcing DreamStudio shortly having refactored it.

[dragonwriter]

> Right now, I think it’s only DreamStudio

Clipdrop, also, at least.

[tivert]

> SD2.0 was a total disaster that shocked the community

Do you have any more details on this?

[ShamelessC]

How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations.

And why are you putting leaked pitch deck in quotes?

[capableweb]

> How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations.

Is there examples of investors investing in a project without even visiting the homepage of the project or trying to understand even 0.1% of what the project is about? I don't think it's super common, but maybe I'm not hanging around the right/wrong circles in SV.

> And why are you putting leaked pitch deck in quotes?

AFAIK, this is the only article that mentions a leaked pitch deck from Stability AI and it only includes one image, which puts into question if there really is a leaked pitch deck, or if it's just one image that got sent to them.

[jacquesm]

FOMO really is a thing. Mind you, this isn't all investors, but as a company you only need to find one that will sign. And that one might serve as validation to a bunch of others who might then want to be in on the round. It can get pretty crazy. At the same time, plenty of solid businesses that aren't hyped can't raise a round at any reasonable valuation. It really isn't a fair world.

The worst is when your solid business suddenly gets a competitor flush with capital which decides to start a price war, which, depending on the amount of capital they've got they may well win before they themselves go out of business.

[szundi]

Yes it happens all the time. Check out the FTX story and many others

[capableweb]

The comparison would be if investors now suddenly say "Hey, we didn't know FTX were trading with cryptocurrencies, we don't like that!", not that things were hidden behind financials and corporate setups.

Even though the troubles of FTX were hidden behind financials, someone who would look deeper into it would spot issues for sure. But maybe not from a brief look, while in this case with Stability AI, no one didn't even do a brief look?

[z3c0]

I'm not sure how one could equate a lack of DD to deliberately misleading investors.

[jacquesm]

That line can be pretty fine. Not in the case of FTX but the perfect poison for any investor is a founder or a group of founders that are true believers but that are mistaken all the same. They don't actually know that they are misleading investors, it isn't deliberate but if it was you wouldn't be able to spot the difference.

[rvz]

> There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations.

Exactly. This reminds me of Fast.co [0] who recently shutdown after attempting to raise more VC capital when it was revealed that they only made 600K and with a very high burn rate.

I don't see how it is so difficult for many commenters here to see that investors were mislead by the claims made by Stability.ai's IP, and now they're also are burning cash with questionable revenues being generated whilst begging to VCs again to raise at a higher valuation.

Some of these investors just run into hype and get burned repeatedly and never learn from FOMO.

[0] https://techcrunch.com/2022/04/05/fast-shuts-doors-after-slo...

[capableweb]

> that investors were mislead by the claims made by Stability.ai's IP

Which claims, precisely? Could you quote these claims that were made by Stability/Emad that makes it clear they were misleading the investors?

Because the article doesn't make those clear, these claims you talk about.

[rvz]

> Which claims, precisely?

Assuming you have read the article (and its links), there is a video podcast which he claimed that 'his team' originally developed Stable Diffusion under Stability.ai without mentioning the original researchers that created the model, until they raised money which one of the researchers clearly mentions this in the article:

> “Once he had this money he became a bit clearer who actually developed Stable Diffusion and that his company did not own the IP,” he says. “Now we come to the interesting thing — if you’re running a company that’s raising a Series A and pushing for a lot of money and your VC guys realise that you don’t own any IP, that probably makes it a bit tricky.”

So according to the leaked Telegram message, the claim of millions of people or '5M' users using Stable Diffusion (for free) and DreamStudio which that itself is a paid SaaS and now they are running out of money [0] doesn't add up or seem to be very promising to Stability either way.

Just other typical VC cash in and burn as much money as possible for inflated numbers.

[0] https://www.semafor.com/article/04/07/2023/stability-ai-is-o...

[emadm]

Most of the original researchers of latent diffusion are employed at Stability AI as is the co-lead of Stable Diffusion.

This leaked deck was before stable diffusion release and the number refers to other open source models built by stability ai employees.

Our model is not SaaS and has never been.

[jacquesm]

'A Series 'B' led by Stripe' -> I really wonder what the story is there. It can't be that easy to fool the Stripe founders.

[impulser_]

It's definitely not far fetched for VC investors to not do any due diligence at all. Obviously not all of them, but there are quite a bit of them that just gamble with their money. Just take a look at how many of them threw money at crypto lol.

[capableweb]

Yeah, again, how many investors invested in a cryptocurrency company and then not until afterwards realized they invested into a cryptocurrency company? Because that's what the article suggests happened, which is obviously ridiculous.

[Barrin92]

>and then not until afterwards realized they invested into a cryptocurrency company?

the correct analogy here is, how many in the crypto space invested in crypto companies and didn't realize that the companies didn't actually have any original IP or product, and the answer is a ton of them