Stability AI imagines a billion-dollar valuation

The Future. Stability AI, the developer behind popular AI-art generator Stable Diffusion, is in the process of raising $100 million from investors, which could greatly expand the company’s various ambitions with its tech. But, if the company depends on its text-to-image tool to bring in money in the long run, controversies surrounding image copyright (AI is trained to make art by processing already-created works) could derail those plans once lawyers inevitably get involved.

Generating funds
Forbes reports that Stability AI is in the midst of conjuring some cash most startups can only dream of.

• Stability AI is in the process of raising $100 million from investors, including Coatue Management and Lightspeed Venture Partners.
• That would give the AI startup, which was founded just shy of two years ago, a valuation of $1 billion.
• Ironically, Stability doesn’t have a “clear business model,” and, being open source, its tech is free to use. So, where’s the return on investment?
• CEO Emad Mostaque says the company has already struck partnerships with “governments and leading institutions” to sell them the underlying technology.

And Stability is apparently much more than its AI-powered text-to-image tool, Stable Diffusion. It’s also funding AI projects that are “developing tools for language, audio and biology.” Open source, of course.

Artist or the art?
Text-to-image tools are blowing up in popularity, with Stable Diffusion joining DALL-E and Midjourney as the two most-used platforms. Up until now, all have been free to use, but OpenAI (the creator of DALL-E) announced that it would paywall its tool after essentially becoming a for-profit business back in 2019 when it accepted investment from Microsoft. Investors do want to make money.

So, if Stable Diffusion is free, the investors must see areas of revenue that the public doesn’t. It’s possible that Stable Diffusion is simply a great marketing tool for what the company’s AI is capable of.