The CEO of Stability AI disappeared in his pajamas following a strange incident

Days after Stability AI founder Emad Mostaque was fired from the company, a Fortune report on unraveling the AI ​​startup paints a striking picture of Silicon Valley’s gold rush fervor and how quickly one of the industry’s most high-profile early investment relationships fell apart.

Stability became a major player in the AI ​​space in August 2022 when Stable Diffusion, the company’s advanced text-to-image AI, became popular in web developer circles. The impressive image-generating model quickly became recognized as an open-source competitor to closed-source rivals such as DALL-E and OpenAI’s Midjourney, and cashed-in investors began scrambling to fund the viral model. By mid-September, massive cash injections from investment firms Coatue and Lightspeed had transformed the company from a high-growth startup into a billion-dollar industry unicorn.

But while Stability’s external star and influence – not to mention Mostaque’s – grew, the company’s internal world was reportedly chaotic from the start.

In one striking anecdote provided by Fortune, in December 2022, Mostaque reportedly suddenly disappeared from the network. That has left employees scrambling to reach an agreement with investors, who infused the company with about $100 million a few weeks ago. Even Mostque’s wife, Zehra Qureshi, who was deeply involved in the company, did not know where he was. She reportedly texted one of the employees that her husband had simply left in his pajamas.

Apart from the pajama incident, the report said the company’s chaos was mainly due to a destructive lack of organization.

Said one former employee who worked in Stability’s London office Fortune that “there was literally no structure to the company,” which explains that employees’ daily tasks were constantly changing in ways that felt much less productive.

“One day (employees) will be working on a marketing strategy,” the employee said Fortune. “Before, they weren’t really sure. And another day they will be working on something completely different.”

At one point, another source said Fortuneat the request of increasingly frustrated investors in Coatue, a “road map” for the company was created. However, the source claims that after sending the document, no one in the company took it out again.

The company’s lack of organization reportedly made it difficult to scale effectively, further souring Stability’s investment connections. Then, in June 2023, Mostaque’s relationship with funders suffered another blow when a Forbes the report accused the founder of exaggerating his qualifications in the past.

Mostaque denied the beautification claims, but a stability investor said so Fortune that Mostaque and his funders “started talking less” after Forbes the report has been published. By November 2023, just one year after raising an incredible amount of funds, a Bloomberg the report revealed that Coatue had called on Mostaque to step down in an October letter to the stability leadership.

“It’s… people resigning from management right after a $100 million round,” said an anonymous stability investor Fortune. “This level of acidification is quite rare – at least this early.”

Of course, the CEO wouldn’t have resigned until last weekend. In an email to Fortunehe reportedly cited the stress of being CEO as the main reason for his departure, but we can’t imagine there was a particularly healthy working relationship in the meantime.

“Nobody talks about how hard it is to be a CEO, and there are better CEOs than me when it comes to scaling a business,” Mostaque said Fortunehowever, he added that he was “very proud of the team there.”

“I look forward to tackling the next issue,” the statement continued, “and hopefully moving the needle.”

The future of stability remains deeply unclear. Now, per Fortuneinvestors and remaining executives are working to salvage what’s left — and perhaps wondering what, beyond the AI ​​hype, has made stability so valuable.

More about stability: Fired founder of Stability AI seen meeting with Microsoft CEO