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Leaked deck raises questions over Stability AI’s Series A pitch to investors

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Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#41

Post by capableweb »

rvz wrote: post #31
ShamelessC wrote: post #19

Earlier quoted context omitted.

How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations. And why are you putting leaked pitch deck in quotes?

> 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…

> that investors were mislead by the claims made by Stability.ai's IP

Which claims, precisely? Could you quote these claims that were made by Stability/Emad that makes it clear they were misleading the investors?

Because the article doesn't make those clear, these claims you talk about.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#42

Post by yawnxyz »

They should have interviewed the investors to understand where they saw the opportunity.

I think an ecosystem of users coming back to perform (and pay for) all kinds of generative AI tasks is totally worth the investment.

I can't figure out how Stability hasn't been able to make revenue though. Are they just not charging enough? Are they subsidizing everyone's compute?

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#43

Post by [deleted] »

anonylizard wrote: post #36
algo_trader wrote: post #22

Earlier quoted context omitted.

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? Or maybe the lizard men are involved?

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 curr…

[deleted]

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#44

Post by anonylizard »

capableweb wrote: post #39
anonylizard wrote: post #36

Earlier quoted context omitted.

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 curr…

> 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…

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.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#45

Post by kevinventullo »

ShamelessC wrote: post #7
amrrs wrote: post #3

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…

> I don't remember Stability claiming in any public forum that they solely developed Stable Diffusion This article makes no such claim. It is about whether or not investors knew.

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.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#46

Post by ShamelessC »

kevinventullo wrote: post #45
ShamelessC wrote: post #7

Earlier quoted context omitted.

> I don't remember Stability claiming in any public forum that they solely developed Stable Diffusion This article makes no such claim. It is about whether or not investors knew.

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.

I’m not defending the investors? they absolutely should do more due diligence. That doesn’t make the situation any less likely.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#47

Post by Havoc »

anonylizard wrote: post #38
Havoc wrote: post #33

>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.

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 c…

> 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.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#48

Post by jacquesm »

capableweb wrote: post #21
ShamelessC wrote: post #19

Earlier quoted context omitted.

How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations. And why are you putting leaked pitch deck in quotes?

> 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 wh…

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.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#49

Post by jacquesm »

z3c0 wrote: post #37
szundi wrote: post #27

Earlier quoted context omitted.

Yes it happens all the time. Check out the FTX story and many others

I'm not sure how one could equate a lack of DD to deliberately misleading investors.

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.

Re: Leaked deck raises questions over Stability AI’s Series A pitch to investors

#50

Post by jacquesm »

rvz wrote: post #31
ShamelessC wrote: post #19

Earlier quoted context omitted.

How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations. And why are you putting leaked pitch deck in quotes?

> 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…

'A Series 'B' led by Stripe' -> I really wonder what the story is there. It can't be that easy to fool the Stripe founders.
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