Stability AI founder Mostaque hits back at media’s allegations of plagiarism and salary arrears

Stability AI founder Mostaque responds to media accusations of plagiarism and unpaid salaries.

When a tree grows large, it will attract attention. In the tech industry, the “biggest tree” right now is a hot AI startup that has become a hot spot in the industry by riding the wave of large language models.

Aside from OpenAI, the hottest AI company is now valued at over $1 billion and is the most favored AI team by investors. Stability AI’s founder, Emad Mostaque, has also become the new “golden boy” of Silicon Valley.

But people always have a past. Recently, Forbes published a long article that exposed a lot of black material about this globally acclaimed team, especially founder Emad Mostaque, by interviewing 13 former employees, AI scholars, and other related persons. The issues involved the founder’s personal background, technology sources, and company management.

The article stated that the founder of Stability AI, Mostaque, exaggerated his role in major AI projects and actually directly used the achievements of a German university research team.

• Comparison of Four New Decentralized Stablecoin Algorithms: Dai, GHO, crvUSD, and sUSD
• What are the concept tokens related to fair distribution that have experienced hundreds of times increase in value on FERC?
• Is the Hong Kong government the only one involved in self-indulgence? How do the people really feel about the licensing system?

The article also pointed out that he exaggerated income and partnerships, and many investors questioned its sustainability. In addition, there have been cases of unpaid taxes and salaries within the company, and his wife has transferred funds from the company account.

In the early hours of June 5th local time, Mostaque quickly responded in his personal blog, refuting the accusations in the media article.

Mostaque stated that, as the company’s influence expands, it is not surprising to become a media target for attack, and accused Forbes of “countless false accusations and distortions.” At the same time, Mostaque also said,”Throughout my career, I have always quickly praised and credited the work of my collaborators. I apologize for any mistakes I have made and have been working continuously to improve.”

Below are the key concerns in Forbes magazine and Mostaque’s point-by-point rebuttal in his blog:

01. Question: Theft of technology

The first issue is the issue of model technology. The source code behind Stable Diffusion is not personal to Mostaque.

Initially, a group of German scholars created an open-source image generator called Latent Diffusion. According to Bjrn Ommer, a professor at the leading Munich and Heidelberg universities research team, this model was launched in cooperation with a New York-based AI startup called Runway. At that time, the model had only a few NVIDIA GPUs available for training.

In June 2022, Mostaque proposed to a group of German academics that Stability could provide a supercomputer, which would be advantageous to German researchers facing high computing costs, for the development of Latent Diffusion, and they accepted. In August of the same year, a new model was released, named Stable Diffusion.

At the time, German professor Bjrn Ommer, who led the research, said that Stability was not aware of the existence of the model when their image generation model was born. They joined later, but Stability’s large news and publicity department reshaped history for their own benefit. Former Stability employees also believe that this is “putting someone else’s work under their own name.”

During the fundraising process, Stability described Stable Diffusion as “our” model and did not mention the original German researchers. A press release announcing the fundraising stated that “Stability AI is the company behind Stable Diffusion” and did not mention the creators.

Founder’s Response:

In response, Mostaque stated on his personal blog that the company acknowledged their contributions on their website and Stable Diffusion’s GitHub page.

02. Second Question: Resume Fraud and Exaggerated Publicity

Emad Mostaque, the founder of Stability AI, is a British-born Indian entrepreneur who was a hedge fund manager before starting his own business. He claims to be an excellent programmer, but his background, technical skills, and penchant for exaggeration have been called into question.

Forbes reported that Mostaque currently only has a bachelor’s degree, not the Oxford University master’s degree he claims to have.

Looking at his resume, Mostaque worked for Swiss fund management company Pictet, hedge fund Capricorn, and some startups after graduation, until he founded Stability in 2019. The company has shifted its development focus several times and even studied the establishment of a vending machine cold storage network in London, as well as emotional support dog NFTs.

It wasn’t until the rapid development of generative AI that Mostaque saw an opportunity to reposition Stability as a unicorn AI company and told investors that he wanted to build a supercomputer to challenge giants like Google and OpenAI.

According to reports, the Stability supercomputer is built of thousands of Nvidia’s most advanced GPUs and received an 80% discount on Amazon’s cloud computing service, rendering it a “strategic partnership” in funding documents. However, Amazon executives have denied this claim, stating that Stability is no different from other customers. In addition, a Stability employee revealed that prior to receiving venture capital, Amazon had threatened to revoke the company’s access due to unpaid bills. Furthermore, Mostaque has called himself the “UN COVID-19 AI Lead”. According to former employees, under Mostaque’s direction, promotional materials shown to investors listed organizations such as the Organisation for Economic Co-operation and Development (OECD), the World Health Organization (WHO), and the World Bank as partners, but all three organizations have denied partnering with Stability.

Founder’s Response:

Resume fraud

In response to Forbes’ allegations, Mostaque wrote in his personal blog, “I did not attend my graduation ceremony to collect my degree certificates, so technically I have not actually been awarded a Bachelor’s or Master’s degree. I have paid £60 to have these certificates posted to me and plan to complete this next month. I hope to attend a graduation ceremony in person.”

AWS partnership

Regarding the partnership with Amazon, Mostaque responded in his personal blog, “We have established a strategic business alliance with Amazon and AWS. As part of this strategic business alliance, AWS built a very rare dedicated computing cluster for Stability in August 2022 at our request.” “There were indeed some payment time issues (especially considering the offset), all of which were resolved in August as we scaled up.”

WHO collaboration

Regarding working with the United Nations on COVID-19, Mostaque responded in his personal blog that they had collaborated with these organizations on the CAIAC project, which ended before the summer of 2022, and this was relevant experience, but not a representation of his current position.

Question 3: Husband and wife control the company and owe wages

According to eight former employees, Stability has had wage arrears and tax arrears. Last year, UK tax authorities visited the company’s office and threatened to seize assets for tax arrears.

At the same time, problems caused by the “husband and wife shop” have also been questioned. Mostaque’s wife, Zehra Qureshi, was previously the head of public relations and later a member of the board of directors of the company, and transferred tens of thousands of pounds from the company’s bank account.

A Stability spokesperson responded that this was “mutual lending between spouses to the company”, and “any loans between Mostaque and Qureshi will be fully paid off by the end of 2022”. Qureshi stated through a lawyer’s statement that she has been providing emotional and financial support for her husband’s career since 2021.

At the same time, some employees revealed that the founder’s wife was overly demanding of employees, causing some employees to be overwhelmed and even cry. The founder’s wife also once claimed to be the company’s chief operating officer, but a Stability spokesperson denied that she had ever held the position. Currently, the founder stated that his wife has left the company, but the organizational chart shows that she still serves as “Foundation Director” in the company.

Founder’s response:

Wage arrears

Regarding this issue, Mostaque responded in his personal blog that all arrears of wages and taxes have been compensated, and they have been working hard to strengthen and improve all these processes.

“Husband and wife shop” problem

On these issues, Mostaque did not mention his wife in the response posted on his personal blog, only mentioning that he would “work hard to strengthen and improve our human resource processes.”

Question 4: Exaggerated income, financing difficulties

The article states that there are still due diligence issues in the financing process of Stability AI, and when Stable Diffusion quickly became popular, the company obtained US$100 million in funds from venture capital in just six days.

When Stable Diffusion was launched for less than two months, Mostaque claimed that the company’s annual revenue exceeded tens of millions of US dollars, but insiders revealed that the actual revenue was less than 10 million US dollars, and the company’s burning rate far exceeded its revenue.

Many potential investors have expressed doubts privately about some of Mostaque’s statements. The founder of Stability has been trying to raise more funds at a valuation of around $4 billion.

From Mostaque’s external statements, it appears that the company has no problems with financing. However, several venture capitalists have leaked that Mostaque has been pitching them and other investors a new $400 million financing plan for months, but has been rejected.

Founder’s Response:

On the issue of fundraising, Mostaque has not responded in detail on his personal blog, only saying that “like many other startups, we are still discussing with strategic investors.”

05. Questioning Five: Copyright Issues Difficult to Resolve

In addition, Stability also faces copyright infringement lawsuits, mainly accusing model training of violating copyright law, with two lawsuits pending court review.

In a collective lawsuit initiated by a group of artists, Stability has filed a motion to dismiss the lawsuit, arguing that the artists failed to identify any specific acts of infringement.

In another lawsuit filed by Getty Images, Stability claimed that the jurisdiction of the lawsuit was lacking and applied for a change of venue or the complete dismissal of the case.

In addition, a Democratic representative has issued an open letter opposing the open source nature of Stable Diffusion, arguing that the model has been abused, such as to generate images of “beaten Asian women” and “pornography involving real people.”

A Stability spokesperson responded that the new version of Stable Diffusion has filtered potential unsafe content to help prevent users from generating harmful images.

In Mostaque’s latest statement on his personal blog, he did not respond to the issue of copyright infringement lawsuits.

It is worth noting that in Emad Mostaque’s open letter entitled “On Setting the Record Straight,” he states that his audience is not the public, but rather Stability AI team members.

Emad Mostaque said the team’s mission is “to make the world a happier place,” and fortunately, “he has an amazing and constantly growing team” to achieve this goal.

“Let’s ship so they can’t ignore the good we do.” Stability AI founder wrote at the end of the open letter.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!