Stability AI, an artificial intelligence company focused on visual content, has reported narrowed losses and revealed it is in the process of raising more cash from investors.
The company was founded in Britain in 2019 and achieved a $1 billion “unicorn” valuation in 2022. It has been regarded as one of the UK’s most promising AI prospects but has endured a turbulent period, ousting its founding chief executive Emad Mostaque amid financial difficulties last year, and is facing several lawsuits. However, it has continued to attract big-name backers such as Eric Schmidt, a former Google boss.
In accounts published in recent days the company reported a pre-tax loss of $48.5 million for 2024, on revenues of $55 million. That compares with a pre-tax loss of $119.3 million on revenues of $9.8 million in a nine-month period for which it reported accounts the prior year.
Emad Mostaque at his London home with AI-generated images
LUCY YOUNG FOR THE SUNDAY TIMES
Stability AI prefers to focus on underlying revenues which exclude various one-off transactions. It said that underlying revenues were $11.4 million in 2024, up from $2.7 million in nine months of 2023. “On a like-for-like annualised basis, the underlying revenue growth rate was almost 300 per cent as the group extended its licence and membership offerings and expanded its strategic alliances,” it said.
Stability AI is best known for Stable Diffusion, its AI model that generates images from text prompts. Mostaque was pushed out in March 2024 after pressure from investors over mounting debts and strategic missteps. It signed a partnership deal in October with EA Sports, known for video games including the FC football series.
In June last year under new leadership it completed a funding round intended to transform “the financial strength of the group, by recapitalising the business through raising over $80 million and renegotiating substantial onerous contract commitments”, it said.
Earlier this year it announced a further, undisclosed “strategic” investment from WPP, the advertising agency. Its accounts, signed on December 9, disclose that “at the time of signing the accounts, the ultimate parent company had initiated its next funding round with its lead investor”.
• How British tech star Stability AI imploded with debt and lawsuits
Last month Stability AI saw off a UK lawsuit from Getty Images, which accused it of copyright infringement. Getty was forced to drop the main part of its case because it couldn’t show that Stability’s AI model had been trained in the UK. Getty was granted permission this month to appeal against a key aspect of the case.
Getty is also suing Stability in the United States, where the AI model was trained. Stability AI’s accounts detail how Getty “has alleged that it is entitled to recover actual damages or statutory damages of up to $150,000 per copyrighted work for each of approximately 26,647 works that it alleges have been infringed, and actual damages or statutory damages of up to $25,000 for each alleged act of providing false copyright management information”.
Getty has not specified a total amount of requested damages, it notes.
Four other lawsuits against Stability AI are detailed including a class action over copyright from artists.