Yahoo Finance Stability AI Names New CEO, Raises $80 Million in Fresh Funds
(Bloomberg) -- Stability AI, an artificial intelligence startup that’s struggled with mounting costs and executive turnover, named a new chief executive officer and got an injection of cash from several investors, including early Facebook backer Sean Parker.
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Prem Akkaraju, former head of the visual effects company Weta Digital, will join as CEO, the London-based company said in a statement on Tuesday. Stability AI raised about $80 million in new funds, according to a person familiar with the financing who asked not to be identified because the figure isn’t public. The Wall Street Journal reported the size of the funding round earlier.
Prior investors, such as Coatue Management and Lightspeed Venture Partners participated, as well as newcomers including Parker, billionaire Eric Schmidt and the venture capital firm Greycroft.
Akkaraju, who also put money into the round, will be charged with stabilizing the British startup. In March, its co-founder and original CEO Emad Mostaque, stepped down following the loss of key employees and shareholders, and shrinking cash reserves. Cornerstone investor Coatue had quit the board under Mostaque, Bloomberg had reported previously, but has returned in the latest funding round.
A representative for Coatue declined to comment on the firm’s return.
The company is “in an ideal position to spearhead the real convergence of generative AI and studio content,” Akkaraju said in the statement. He will be joining the board along with Parker, who will serve as chairman, the company said.
The company rose to prominence after raising $101 million in venture capital in late 2022 on the back of Stable Diffusion, a popular image-generation AI tool that the company managed. The startup soon faced a flurry of management and legal issues, including a lawsuit from Getty Images. Unlike rival AI companies, Stability failed to raise a larger financing round to cover its high computing costs.
Shan Shan Wong and Christian Laforte, who were named interim co-CEOs after Mostaque’s resignation, will remain with Stability AI as chief operating officer and chief technology officer respectively, the company said.
--With assistance from Rachel Metz.
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