Stability AI decimates staff just weeks after CEO's exit

More like Instability AI, right kids?

Stability AI is laying off staff in its search of steadier footing following the sudden departure of its CEO late last month.

The British generative AI builder revealed the layoffs Wednesday night in a memo to staff obtained by The Register.

"Following a review of the global team, we have determined the need to restructure parts of the business, which will sadly mean saying goodbye to some colleagues," the letter signed by interim co-CEOs Shan Shan Wong and Christian Laforte reads.

"These decisions have not been taken lightly and they are intended to right-size parts of the business and focus our operations, which is critical to setting us on a more sustainable path."

The memo doesn't disclose the extent of the layoffs, however CNBC reports that about 10 percent of its global headcount, or about 20 people, are being let go.

The layoffs come as the startup - best known for its work on the Stable Diffusion text-to-image generation model - scrambles to get its spending under control, even as it releases updated models and features. On Wednesday Stability rolled out API access to its third-generation Stable Diffusion model, presumably in bid to bring in new business from apps built atop the service.

Despite the popularity of its models, the extreme cost of the GPUs on which Stability's work depends resulted in massive losses that have reportedly drained its coffers. The AI biz was said to be on track to spend $99 million to rent GPUs from Amazon Web Services, Google Cloud, and CoreWeave, but by early autumn had already apparently defaulted on its AWS tab. Making matters worse, Stability is only expected to squeeze $11 million in sales from this investment.

Many of Stability's financial struggles have been pinned on former CEO Emad Mostaque, who stepped down in late March.

Following his departure, Wong, then Stability's COO, and CTO Laforte took the reins as interim chief executives. The two are now leading efforts to turn Stability's fortunes around.

Whether their efforts to cut costs and streamline operations will be enough to stabilize the currently ironically named biz remains to be seen. However, Stability's financial predicament isn't the only challenge facing the model builder. It is also facing down multiple copyright infringement cases brought by Getty and other artists who say their work was inappropriately used to train Stable Diffusion. ®

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