Stable Diffusion “stole” code to build a billion-dollar empire? Stability AI founder exposed in scam

Emad Mostaque, the founder of Stablity AI, was recently "skinned" by Forbes!

Forbes revealed in a long article that the source code of Stable Diffusion, which made Stabiliyt AI famous, was actually written by another group of researchers.

Before the release of Stable Diffusion, scholars from Germany and the start-up company Runway jointly launched a software called Latent Diffusion. An open source image generator.

And Mostaque took other people's works and wrote his own name on them - this is the origin of Stable Diffusion.

After "stealing" other people's results, Emad Mostaque relied on his extraordinary verbal skills to transform Stability AI into a startup company valued at US$1 billion.

Moreover, after Forbes interviewed more than 30 people (including current employees, former employees, investors, former colleagues, etc.) and read through various promotional materials and internal documents, it was discovered that he also There are many black spots such as falsifying academic qualifications and work experience, which completely exaggerates his personal role.

And this storm caused a lot of attention in the circle. Sebastian, a machine learning expert, also jumped out and said: No, no, no, no, there are still people who don’t know Stable. Diffusion is actually based on Latent Diffusion, right? This is a boomerang.

As early as 2022, he pointed out in his academic blog that the results of Stability AI are actually based on Latent Diffusion.

The real hero behind Stable Diffusion

In 2021, a team of researchers in Germany and Startup Runway has partnered to launch an open source image model called Latent Diffusion.

The team of researchers includes scholars from Munich University (LMU) and Heidelberg University. The leader of this research is Professor Björn Ommer.

According to Professor Björn Ommer, the training of Latent Diffusion only uses dozens of NVIDIA GPUs.

Seven months later, in June 2022, Mostaque reached out to them and Stability AI provided them with the supercomputing they needed.

The increase in computing power has significantly improved the performance of Latent Diffusion.

Unexpectedly, in August, this new model was named Stable Diffusion and released under the name Stability AI.

In a press release issued by Stability AI, Mostaque called Stable Diffusion "the most popular open source software ever."

So, just by providing computing power, other people’s results become your own?

In this regard, a former employee of Stability AI said of Mostaque: "He is very good at using others to You can sign your own name on your works, or use them to do things whose authenticity cannot be verified."

The outside world can't control that much about what is right and what is wrong.

Within days of Stable Diffusion’s launch, Stability AI received $100 million in investment from two companies called Coatue and Lightspeed. This investment is eight times the amount Mostaque raised earlier.

This round of financing directly pushed Stability AI’s valuation to over US$1 billion, although the company was not yet profitable at this time.

In subsequent press releases, they only said that the company behind Stable Diffusion was Stability AI, without mentioning the contribution of the German team and Runway.

Of course Professor Ommer was unwilling to accept this. He hoped that his laboratory could also be publicized, but the news department of his university was on vacation at the time.

Professor Ommer said this in an interview with Forbes, "As far as I know, when we released Latent Diffusion, Stability AI didn't know about it at all. They jumped on it later. Get on this carriage."

And Stability spokesperson Bishara said that the company has publicly mentioned the contributions of LMU and Runway many times on its official website and Stable Diffusion's GitHub page.

(The above two are GitHub projects released by Stability AI, which are the first and second generations respectively. Generation, if you can see the contribution of LMU, you win)

(It is undeniable that , Stability AI did mention LMU in the announcement on August 10, 2022)

But the German team did not agree. They felt that Mostaque was misleading in the press release. public.

Professor Ommer said: "What I learned from this lesson is that if your company has a strong news department, you can change the facts and reshape history at will."

What’s even more outrageous is that in October, Stability AI also criticized it, claiming that the new version of Stable Diffusion released by Runway had stolen its intellectual property rights.

## Runway founder Cristóbal Valenzuela couldn’t bear to fight back: This technology is open source and there is no copyright infringement at all. possible.

Subsequently, Mostaque withdrew the accusation. He later explained to a Forbes reporter that he was actually worried about Runway’s model. The version lacks guardrails.

Both Professor Ommer and Valenzuela were very disappointed with Mostaque - "They entered the field that we have studied for many years as newcomers, and then they got the honor that they should not have."

Now, Professor Ommer’s laboratory and Runway have stopped cooperating with Stability AI.

Forbes’ long article peeling

Stability AI became a $1 billion company with the help of a viral AI text-to-image generator and — per interviews with more than 30 people — some misleading claims from founder Emad Mostaque .

In this skin-picking article, Forbes described Mostaque in a very mocking tone.

He started the contemporary renaissance and set off the AI ​​gold rush.

He is the holder of a master's degree from the University of Oxford, an award-winning hedge fund manager, a trusted partner to the United Nations, and the founder of the technology behind Stable Diffusion.

As a representative of the wave of generative artificial intelligence, his ideal is to change Hollywood, promote the democratization of education, and abandon PowerPoint. He hopes to win the Nobel Peace Prize.

It can be said that in last year’s AIGC wave, the most eye-catching twin stars were ChatGPT and Stable Diffusion.

According to Mostaque, it was because of his company’s Stable Diffusion that OpenAI saw the potential of large AI models, so OpenAI followed closely and urgently launched ChatGPT. , which triggered the subsequent Nuggets wave.

But Forbes mercilessly stripped Mostaque: He did not receive a master's degree from Oxford University, only a bachelor's degree; the hedge fund collapsed after a year; the United Nations did not have one for many years Cooperate with him; the source code of Stable Diffusion was written by another team.

Despite this, he achieved real success.

Last summer, Stable Diffusion was all the rage. By October, Stable Diffusion’s daily active users had reached 10 million.

In May of this year, the White House nominated Stabiility, along with Microsoft and NVIDIA, as one of seven leading AI developers to work with them on the federal AI security plan.

He had dinner with Jeff Bezos, and retired Google founder Sergey Brin also made a rare appearance at the Stability AI conference.

The open source AI vision described by Mostaque has fascinated many technical talents. Adobe's 20-year-old employee chose to leave and join Stability AI.

After receiving new financing in the summer of 2022, more top talents followed. Among the company’s 140 employees, there are vice presidents of R&D who were former directors of Nvidia, and others from the head of Google Brain, as well as three PhD students from Ommer's lab.

Seeing this, have you discovered Huadian?

The reason why Mostaque can claim that Stable Diffusion is the result of his own company may be precisely because of the participation of these three doctoral students.

But the time they joined was after Stable Diffusion was released.

The work experience of Andreas Blattmann, co-author of the Latent Diffusion paper

After Forbes uncovered Mostaque, it was found that in order to improve the reputation of Stability AI, he carefully designed various strategies and exaggerated his role in major AI projects. At the same time, the contributions of many researchers were ignored. erased.

In addition, he also made exaggerated descriptions of his cooperative relationships with Amazon and the United Nations.

This has aroused suspicion among some AI experts and investors.

According to some venture capitalists, Mostaque is raising hundreds of millions of dollars in cash at a valuation of $4 billion. It also claimed in October last year that the company’s annual revenue had exceeded US$10 million.

Mostaque’s clarification

After the publication of this Forbes report, it caused a stir.

Mostaque also quickly accepted the interview and said that he was "very sorry" for the Forbes report -

"Don't be confused with Talk to those who ignore the facts and just want to induce readers to click.”

At the same time, Mostaque also wrote a blog in response.

He said that as the company's popularity and influence continue to grow, it is not surprising that Forbes would write such a devastating article.

Although the team spent weeks trying to communicate with Forbes to correct the facts. But apparently, they chose to ignore the truth of the matter.

Blog address: https://emad.posthaven.com/on-setting-the-record -straight

Mostaque said that there are countless errors and misinterpretations in this report, so a clarification is needed here: (Excerpt)

·Oxford University Degree

#I didn’t attend the graduation ceremony to receive my degree, so technically I don’t have a bachelor’s or master’s degree .

Currently I have paid £60 and will receive these degree certificates by post next month.

The issue of academic qualifications can be said to be quite important. After all, if the fraud is really discovered, it will be a big deal. Not surprisingly, the first question VB asked during the interview was this:

VB: Are you saying that you have completed all the courses for the master's degree, but you just did not send a check to receive the degree certificate? Just want to clarify what you mean.

Mostaque: Yes. I didn't attend the graduation ceremony or send a form to have my degree certificate mailed to me, so technically I have neither a bachelor's degree nor a master's degree.

· Stable Diffusion

We have publicly stated many times that Stability AI is a collaborator in the development of the first version of Stable Diffusion, and Together with LMU's Computing and Vision Study Group and Runway.

Details of this collaboration have been shared publicly on Stable Diffusion’s Github and Stability AI’s website since launch.

In addition, three of the five authors of the paper work at Stability AI. And the best way to solve this problem is to keep moving forward.

· Salary Payment Situation

#We do have some cases of delayed payments, but all of them are quick That was corrected - I personally paid my staff's wages, including waiting for funding from government programs, etc.

We are also paying affected employees additional wages to compensate for the possible inconvenience and to cover any associated expenses they may incur, such as overdrafts, etc.

Since the end of 2021, there have been no unpaid wages during normal operations. All issues were resolved quickly.

When you go out, you only have to talk and brag

And according to Forbes, Mostaque didn’t tell the truth when it came to academic qualifications.

True version: Mostaque graduated from Oxford in 2005 with a bachelor's degree.

Hi version: "I am a master's degree!"

How did Bishara get round: The boss "plans" to apply for Oxford. MA can be awarded directly to alumni without having to take graduate courses. "No surprise", the boss will "really" get a master's degree in July!

JP Smith, a fund manager from Switzerland, said, "He is really good at making up stories."

Initially, Smith recruited Mostaque. Ecstrat worked as a consultant, and Mostaque later joined the Capricorn hedge fund.

Since then, Mostaque has been bragging that he was the one who helped the building collapse, turned the tide and saved the company that was in trouble.

But in fact, Mostaque doesn’t have that much power at all.

Damon Hoff, co-founder of Capricorn, said that Mostaque’s performance was simply not good, and this 330 million fund disappeared in 2018.

And with the explosion of generative AI, Mostaque’s little thoughts began to come alive again.

For a person who knows how to deceive by making up stories, how could he miss this opportunity?

Employing various marketing tactics and exaggerated narratives, he successfully positioned Stability AI as one of the world’s leading unicorn AI companies.

In order to achieve this goal, Mostaque began to "deceive" investors again, claiming that Stability AI is assembling one of the world's 10 largest supercomputers.

He bills himself as a right-hand man for AI researchers, generously willing to provide funds, and lends supercomputers to be built in the future to AI developers to help them work with Google, Tech giants such as OpenAI compete.

He said that the supercomputer to be built consists of thousands of NVIDIA's most advanced GPUs, which were purchased from Amazon at a 20% discount.

But Bratin Saha, who works at a Seattle-based tech giant, said what Stability AI is building is no different than its other clients.

Moreover, Amazon has threatened Stability AI to revoke its access to Amazon GPUs.

The reason is very simple - not enough money was given and I owed millions.

Regarding the issue of arrears, the reporter asked Stability AI for clarification.

They had no choice but to admit it.

And the "20% off" GPU that Mostaque previously claimed is actually the standard discount Amazon provides to all customers who commit to leasing for a long time.

Bishara said that with the support of Amazon AWS, any payment procedures are managed in an orderly manner.

In fact, Stability AI describes the Vincent diagram software Midjourney as part of its ecosystem, and the statement that it co-creates the product and organizes the user community is completely nonsense.

David Holz, the founder of Midjourney, said that Mostaque only provided a small donation. Otherwise, Midjourney has nothing to do with Stability AI.

Some employees said that Mostaque boasted that he had cooperated with international institutions such as UNESCO, OECD, WHO, and the World Bank, but these institutions were not involved in Stability at all. The subsequent development of AI.

In response to this statement, Bishara said that Mostaque did not say such a thing. But these organizations are indeed partners of Stability AI.

In response to Bishara’s statement, a spokesperson for UNESCO said that the organization has nothing to do with Stability AI. Other organizations have also come forward to confirm that Mostaque is completely nonsense.

Up to this point, Bishara could not say a word.

Not paying wages in arrears

Of course, the real revelation depends on the employees. Among the employees who have left, plus those who have not yet left, there are 7 I reported to Forbes that my salary was always delayed and sometimes not paid, sometimes for as long as a month.

There are also five internal employees who said that from 2020 to 2023, there have been salary delays and delayed payments.

Even the British tax agency came and threatened to seize assets if taxes were not paid.

Former intern Eric also reported the problem of wage arrears. He said, "I am still waiting for the reimbursement that was due to me in August last year."

In this regard, Bishara said that the situation has improved. Since 2021, Stability AI has not recorded non-payment of wages during normal operations. However, it cannot be ruled out that certain special "external reasons" may cause delayed wages.

The above reimbursement for interns in arrears, Bishara said, is currently being verified.

It’s hard to say whether I believe or not believe what Bishara said. But the financial problems that have occurred cannot be covered up.

What’s even more troubling is that according to Forbes’ transaction screenshots, tens of thousands of pounds were once transferred from Stability AI’s company account to Mostaque’s daughter-in-law’s personal account.

However, Bishara still had her say. She said that the Mostaque couple had provided loans to the company at the beginning, so the transaction was actually reasonable.

He said, "The company is making progress, and the finance is also following up. We have re-conducted a comprehensive reconciliation and activated a new financial team with more experience. Everything related to the Mostaque couple The arrears will be settled in full by the end of 2022."

Regarding this transaction, the lawyer for Mostaque's wife Qureshi refused to answer any relevant questions. But they issued a statement stating that Qureshi himself has been providing emotional and financial support to Mostaque's business since 2021.

Qureshi’s official position at Stability AI is the head of PR, but according to employees (who are really pro-employees), Qureshi describes his position in the company as COO (Chief Operating Officer) , it even says so on the business card.

As expected, Bishara had something to say again.

He said that these business cards were designed for fun. A friend wanted to use them to practice his business card design skills, but he had never used them.

You see, our PR skills depend on Bishara.

At this time, another employee came to break the news. One current employee and four former employees said that Qureshi often scolded his subordinates in the company, and sometimes made them cry.

In this regard, Qureshi said that this is just because her management style is relatively direct. It is a pity that some people think that she is "targeting" them. Her purpose is not to make people cry. .

Earlier Bishara had said that Qureshi would leave the company to pursue personal development and no longer serve on the board of directors.

Of course, this sentence still seems like fart. In the organizational chart in early May, Qureshi was still the head of the foundation, equivalent to Mostaque.

Copyright issues sued

Traditionally, venture capitalists have to spend several months conducting due diligence, designing market analysis, founder review, and communicating with customers.

After completing the process, you can decide whether to invest or not.

But Mostaque boasted that it would only take 6 days to raise 100 million.

Gaurav Gupta, a partner at investment firm Lightspeed, said, “I really want to invest. We can see that this technology is truly transformative, although we don’t know the technology yet. All usage scenarios."

Mostaque said in an interview that Stability AI is customizing AI models for dozens of customers, but he could only name two.

One is the Indian company Eros Investment-the company's media unit has been delisted from the New York Stock Exchange and has been sued for misleading investors.

The second one is to provide 4 million tablet computers to children in the African Republic of Malawi.

In terms of financial revenue, Mostaque said that the company’s annual revenue is higher than the number reported by OpenAI.

But in fact, according to people familiar with the matter, Stability AI’s ARR (annual recurring revenue) is less than $10 million, and it spends much more than it earns.

Like many AI startups, Stability AI is also burning money and is in urgent need of a lot of funds.

However, in January this year Mostaque said that his company had no problems raising money.

Bishara also said that the company still has a large amount of reserve funds.

Putting aside the funding issue, Stability AI is also facing two lawsuits, both related to training models that violate copyright laws.

But the company rejected the appeal, saying it could not identify any specific instances of infringement.

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