How Stability AI’s founder tanked his billion-dollar startup | Hacker News Reader

How Stability AI’s founder tanked his billion-dollar startup

forbes.com

48 pointsminimaxir48 comments

Please note that this Forbes author in particular seems to have a vendetta against Stability AI and has been publishing hit pieces for months now.

The accusations of bias is why it's very relevant that there are 32 independent sources for the article.

Bloomberg also published a similar independent negative article about Stability AI, unless you believe both Forbes and Bloomberg have a thing against them: https://www.bloomberg.com/news/articles/2024-03-26/stability...

People don't seem to have wrapped their heads around the consequences of media abundance coupled with media coordination. You can find 32 sources to back up anything.

I just had 32 unnamed sources tell me you cannot :)

I have 64 unnamed sources telling me that all of your sources are actually just you wearing different hats.

I have gotten to the point where I just give zero credibility to unnamed sources. And Forbes is sadly nowhere near as credible as it once was. It’s basically white collar Buzzfeed now.

Which is not to say that I disagree with anything they said here or think they are lying, but if someone thinks it’s a hit piece, 30-some mostly unnamed sources won’t change their mind. A journalist can never be caught making up an unnamed source, it’s like saying “I don’t recall” on the stand.

Bloomberg article is better, but note they also ran that I said was spy for the British government when I worked in counter extremism work including writing in this topic for Reuters, Wall Street Journal and others.

These are details we gave them and they chose not to run.

In addition they ran reporting that we raised less than $25 million of additional funding when we raised well over that when we said that was false based on sources again.

We had to take it legal and right up to lead editor.

To be clear: we never raised less than $25m of additional funding.

Here are some examples of the work that I actually did in public that they chose to run as I said I was a spy

https://www.wsj.com/articles/emad-mostaque-the-spreading-men...

Here is me predicting ISIS as they would later be known would likely topple Western Iraq the following summer in December of 2013, top of business insiders chart of the year (which I think is very interesting)

https://www.businessinsider.com/most-important-charts-2013-1...

You'll be suing Forbes for libel then, right?

You didn’t predict anything. This was a well shared idea back then. Stop trying to act like you were a god tier extremism researcher. It’s irrelevant.

I mean facts are facts. Emad is gone, the company has lost people (researchers and executives), and they have not announced a blockbuster AI funding round.

Emad is still the company's majority shareholder and is also commenting on this thread, so I would not describe him as gone.

Not sure if this article is a hit piece but it certainly is reporting a lot of normal situations for startups as if they're extremely bad or fraudulent. There's nothing new about tech companies not being profitable, or researchers leaving once they've done their research projects.

On the other hand, if you believe some venture is scam, or is actually rotting under a glossy exterior, then it makes sense to keep writing about it and attempt to expose the situation over time. Especially if the subject keeps trying to cover up and advance the false narrative.

So here we are today, who was right in the end?

Emad is Robin Hood. Took VC wealth and redistributed it to the masses. Would love to see this more often. Do we really want Microsoft to monopolize AGI? At this rate average citizens won't even have computers capable of running a command prompt, all devices will be like iOS consumption only. "Sorry Dave, you're not allowed to open a terminal."

> "Sorry Dave, you're not allowed to open a terminal."

No 9000 computer has ever made a mistake or distorted information.

VCs don't have wealth, the people with money are called LPs or angels. I also don't know the particulars in this case, but they're usually pension funds rather than individual rich people.

(Which does mean VCs are stealing from pensioners by taking a lot of fees to invest in something worse than an index fund.)

Still got to thank them for making AI image generation available to your average person, instead of permanently gated behind a cloud service.

> and “not planning to pay AWS at the end of October for August usage ($7M).”

This gave me a flashback to a long time ago, when we couldn’t pay an AWS bill for a couple grand.

Makes me wonder what the largest unpaid AWS bill looks like, and whose it was.

FTX/Alameda also had unpaid AWS bill of ~single digit millions.

I'd be interested to know if Amazon has a client risk group, because I've seen a few of such large monthly bills, and I sure hope they don't settle these in arrears at such a low frequency as monthly payments.

I imagine there's limits in how much you can owe without a track record of paying your bills?

I find it hard to imagine a new account could rack up a bill of a few million dollars in the first month without AWS batting an eye.

They quota lock you for billing history issues

I'd be interested to see what Amazon's actual costs were on that bill.

Their overall operating margins are around 30%, but it would be interesting to see the cost / revenue line items on a bill like this one.

It would cost way less than 7M to build from scratch whatever they are using AWS for

There has been a lot of news/retrospectives but this is new, and is based off of "Company documents and interviews with 32 current and former employees, investors, collaborators and industry observers"

I kinda gave up on these reporters when they insisted on posting obvious lies, like in this case I don’t speak to Jensen since October 2022 and numbers and other reports were clearly fabricated.

Like what do you do?

I think you just ignore and ship good things, some great models coming across modalities and Stability AI is one of the fastest growing revenue companies ever despite the BS against us

https://x.com/emostaque/status/1773766734522040508?s=46

I'd agree that OpenAI was a tarpit project for many years.

But you did ship good things and ran out of money anyways it seems

Company has money, revenue is better than peers with a path to profitability and one of the fastest ramps ever.

Tesla, Apple, NVIDIA all had these moments as well as innumerable other good companies.

Was tough to navigate through, very proud of team.

Wasn’t Emad working at a hedge fund before this? I’m surprised the article glosses over the fact that he had 0 experience in the tech industry before starting one of the most ambitious tech projects ever

Are Hedge Funds selection machines for extremely competitive immoral engineer-types?

The cliché is CEO positions select for soiciopathy.

Different games seem to select for certain types of antisocial thinking.

Is there a pattern to the type of person (a) selected by hedge funds, (b) successful at hedge funds?

I don't believe we should stereotyping individuals based on their group categories. Neither do I think that we can apply psych labels to groups.

But we don't seem to have better ways to question the issue...

Getting a job at a hedge fund is not particularly noteworthy. Being really good at it, however, is rare and those people don’t simply leave, as you’re earning the equivalent of a successful startup exit every year.

Someone leaving a hedge fund while still early in their career is a strong negative signal. e.g. SBF and Caroline both from Jane Street.

Didn’t Bezos leave a hedge fund?

I started as a hedge fund manager at 23 doing global macro at Pictet & quit when my son was diagnosed with autism to build an NLP team to analyse clinical trial & other data and undertook pathway analysis of neurotransmitters focusing on GABA/Glutamate balance to repurpose medicine to help him filter, after which he went to mainstream school.

One of the things I am focused on now is bringing that research with the new medical LMs so for autism, cancer, MS, Alzheimer’s & more everyone has comprehensive, authoritative and up to date knowledge at their fingertips on these and also a guide so they never feel alone and helps them on their journey if they or a loved one gets this diagnosis.

It will be open and transparent, took a while to build to here but looking forward to next steps.

There is more to life than power and money.

> There is more to life than power and money.

I've never tried either end of the power or money scales so I'm not qualified to agree or disagree.

Your story is about personal power - applying your skills to a problem that most people are powerless to solve.

For some reason your story made me think of this: https://bessstillman.substack.com/p/please-be-dying-but-not-... -- Where's the accessible database of trials?

Yes, after 8 years.

The only other tech CEO I can think of who has a Hedge Fund background is Jeff Bezos; are there enough other examples to start stereotyping?

Yeah, I'm probably thinking of the perceived motives of some outspoken capitalists (Note that I would call myself a hippy capitalist). And amoral is probably a better word than immoral. I only have near experience with one hedge fund manager - not so common in New Zealand. So my own biases are coloured by the mediums I learn from.

I was lead architect of CAIAC to organise Covid knowledge launched at Stanford before this

https://hai.stanford.edu/watch-caiac

The big companies here and more promised me tech to build the system and didn't deliver which is why I did Stability to make sure there were open alternatives.

Still achieving the output we did based on completely diverse global team form mostly untraditional backgrounds outside SF & the resources we had is a positive not negative story.

The first 20 employees I hired were graduates from the job centre in Ilford and we built this above a chicken shop.

Talk about that here https://x.com/PeterDiamandis/status/1773863016775213545?s=20

Oh apologies, thanks for clarifying

https://archive.is/snbeV

What are the good open source alternatives to stable diffusion for text to image generation?

Just browse huggingface and you’ll see literally hundreds. Lots of them are totally from-scratch trained, and not just fine tunes of SD.

Never run out of money. Whatever you have to do.

The point of limited liability corporations, and SV startup culture, is to make it safe to run out of money.

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