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.
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?
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?
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
> 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.
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.
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.
That's exciting to hear! I wish you all the best with the release, the community will surely appreciate it. Thanks for the work you do with Stability AI, there are quite a few of us that really appreciate it, no matter of these hit-pieces :)
> 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.
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.
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?
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.
> 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.
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.
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.
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.
>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
I don't remember Stability claiming in any public forum that they solely developed Stable Diffusion. In fact the first stable diffusion model on Hugging Face is under CompVis Org.
They had an issue with Runway with a model takedown or something but I think that was sorted out later on.
I don't know why the article seems desparately trying to show Stability in bad light while they have in fact funded a lot of AI model development and helped release it with permissive licence
Some of their behaviour over the past year makes me feel the company has a culture which doesn't hold honesty as a core value.
The Runway takedown or something your refer to was Stability sending a takedown request to HuggingFace
claiming an IP leak over the publication of version 1.5 by their academic partners Runway. That was sorted out, if you want to call it that, after massive public outcry and Emad claiming it was just confusion on HuggingFace's part. HuggingFace then confirmed Stability's legal team contacted them to retract the request afterward.
Then there was the incident where they contacted Discord to take over the main StableDifussion channel without informing the owner. There was also the incident where they convinced the owner of the main stable diffusion subreddit to give them mod rights and removed all other mods as well as any info and mentions related to one of the most widely used StableDiffusion tool (Automatic1111).
I normally don't like engaging in these things but think should step in given increasing fud.
Stability AI lawyers never contacted HuggingFace requesting an IP takedown. You may ask HuggingFace themselves.
RunwayML agreed not to release 1.5 for safety reasons in writing and then chose to anyone presumably leading to confusion by our tech team who let HF know it couldn't be them.
Hugging Face themselves did say the takedown request was not a formal legal request from the get go:
"Company StabilityAI has requested a takedown of this published model characterizing it as a leak of their IP
While we are awaiting for a formal legal request, and even though Hugging Face is not knowledgeable of the IP agreements (if any) between this repo owner (RunwayML) and StabilityAI, we are flagging this repository as having potential/disputed IP rights. [...]"
They didn't hint at an account hijacking by a third party if that's what your team intended to convey to them however.
To add to that, your CIO addressed the community at the time and characterized RunwayML in the following terms: "[...] We also won't stand by quietly when other groups leak the model in order to draw some quick press to themselves while trying to wash their hands of responsibility."
Oh, those poor investors! It would be absolutely unreasonable to expect them to evaluate the business fundamentals of their investments; it’s not as if that’s literally their entire job.
You can't pin it on investors, when founders deliberately schedule fundraising rounds tightly not to give investors time to think. This benefits the founder, but if they pull a fast one, investors will lose trust and be less lenient towards the next founder. Trust is a pillar of the venture capital ecosystem.
I think in the world of ML, contributing that much compute should count as co-creation. There is a lot of code published by academia that just needs compute and data, but they don't receive it. Stability deserves credit for Doing the Thing. IP rights are another thing but that's a whole subtree of legal questions that society is barreling towards.
People have to remember, back in 2022-08, AI was still not a big thing. DALLE-2 was only released 2 months ago, and was just a quickly forgotten novelty.
Emad had to have funded the training of SD even before DALLE-2, investing the cash in exchange for branding rights to a free model.
Its obviously an extremely good bet in retrospect (RunwayML is probably bleeding with regret), giving stability herculean name recognition despite not having done any high profile research themselves. But when the bet was made, it was quite an insane bet requiring a lot of vision.
Most of the latent and stable diffusion authors also work at Stability AI, as do many other generative AI research leaders in media.
Naming rights on the model were no part of the compute grant, we give them incredibly freely and also support. Naming was suggested by the researchers in this case.
Dumb hit-piece, Stability's contribution was vital to the creation of those models. Article doesn't even make the claim that the investors were confused on if Stability owned the models, it just insinuates they were for absolutely no reason.
What reason? Did they have an investor tell them they were misled? It's not in the article. Did Stability hide anything about who made the models? Again not in the article. It's content-less insinuations.
Whoa. So I got a DM on Twitter about a week ago thanking me for pushing back on Emad’s claims about cluster pricing. I didn’t really take it seriously (or understand it) till now:
So for whatever that’s worth, here’s a claim that predates this article by a week that emad was lying about stability origins to investors. I’ve trimmed the name off the DM for obvious reasons, but it’s from someone who seems credible (though I don’t know them).
I don’t like posting random unsubstantiated accusations without context. But this article just provided both.
As for what he lied about (or stretched the truth), I don’t know. I don’t even know if it matters. But this is why I never lie to investors, and why I’ve always really felt negatively towards colleagues who stretch the truth. It’s all kinds of misleading, and it’s a kind of misleading that tends to matter.
It would also make me upset as an investor if I found out that someone had fooled me. So even if it’d be to my advantage to lie for money, I can’t imagine doing it. I’d rather live in relative obscurity.
There's no report from any investors who suggest they were confused about IP/original-work in any way. There is an assertion to the contrary in the article: "Stability told Sifted that the investors that backed the company were fully aware of Stable Diffusion’s IP ownership."
So while it's possible investors just don't want to admit they didn't look too deep, it's also possible everyone relevant knew exactly what was being offered: a fast-moving team of opportunists, adapting core tech originating elsewhere. That alone is plenty valuable in a hot area. 'Fast-followers', rollups, & integrators can do great in a tech boom.
So, this story might mainly be resentful competitors/employees taking potshots. (Or maybe even: potential next-round investors trying to win for themselves a lower-valuation via media spin.)
Another poorly reported hit-piece from Sifted. This is a non-event. Anyone who’s been close to fundraising knows that investors expect founders to build a narrative and do their own due diligence.
That they funded the model is not in question. It is that they claimed they owned the IP to said model in pitches/messaging to investors when they in fact, did not.
Yeah, we were always really clear about that, the GitHub is clearly CompVis for example.
We fund dozens of models and collaborate on them too, the ones we assert IP over are those in our GitHub as benchmark models based on open research coded and trained from scratch.
It gets really complex otherwise when you have lots of collaborators eg on the LAION models.
Yes, even if they did do that which they didn't, that is also what OpenAI, etc do with their models like GPT and Dall-E when infact they come off papers like Transformers is all you need and the same LMU paper.
Stability has done it better since they purposely acknowledge the researchers instead of the way the public domain research is just used to make their own model with no acknowledgements (no co created mention anywhere). OpenAI would say 'co created by Google' if they did.
>what official affiliation there was between Stability and EleutherAI, they said: “None.”
That's wild. Handing out a bunch of cash for nothing except vague association. No control? No equity? No IP?
Reminds me of marketing. Cola puts logos on t-shirts of players and proclaims to have sponsored them, but I have yet to see cola claim to have "co-scored" a goal.
I am on the board and delighted to continue to support their work as an independent organisation for LM evaluation, alignment and interpretability which is much needed.
Indeed though our approach was handing out significant compute for no control, no equity, no IP.
Similarly we funded the beta of MidJourney with a cash grant for compute without ever even floating asking for equity etc as it is a market-creating innovation.
At the time MidJourney was using cc12m_1, a model developed by one of our lead (employed) generative AI developers Katherine Crownson / RiversHaveWings (https://github.com/crowsonkb/v-diffusion-pytorch)
All AI companies used to release their top tier research into the open. Google doesn't have control/equity/IP over the transformer paper.
GPT-J and co are GPT-2 equivalents, that are not actually useful in any way. So its more just building up the open source ecosystem.
Stability did get the branding rights to SD1.4, they spent a few million to get incredible name recognition out of nowhere, in the hottest and most competitive tech space ever. Those sponsored alphago tournaments costed way more and had less reputational impact than the millions using SD every day.
> Google doesn't have control/equity/IP over the transformer paper.
A model is not a paper and the transformer paper isn't what keeps the lights on in Mountain view. (Nor alphago for that matter.)
Agree on the incredible name recognition, but that's a mighty fragile thing if not built on sound foundation. Even a slight breeze like this article can make it wobble
It'll probably work given how everyone is falling over each other trying to give AI-anything money, but still gives me strong dot com era vibes. Appearance first, substance perhaps later.
Unclear. I think flagging is actually done after a threshold of users click flag? Which seems like not such a great system given stories with potential conflicts of interest between the user base and moderation.
I recently saw a satirical post about vector databases get to top of HN and then drop to place 60 rapidly (no flagging in that instance).
I am trying to maintain an assumption of good faith with regards to moderation but lack of explanation on suspicious actions when it comes to stories with clear conflicts of interest between YCombinator/investors and the hn community don’t inspire confidence.
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