Emad Mostaque

Under Mostaque's leadership, Stability AI had documented worker payment issues. According to Forbes, seven current and former employees reported wages and payroll taxes were "repeatedly delayed or unpaid"—in some cases for more than a month. Four employees independently reported that UK tax authorities (HMRC) appeared at company offices and threatened to seize assets due to overdue taxes. A former intern reported still waiting for payment on an invoice for 181 of 300 hours worked. The company was spending an estimated $8M monthly while having less than $4M in the bank by October 2023.

Mostaque resigned as Stability AI CEO on March 23, 2024, citing philosophical concerns about AI centralization. He stated: "You can't beat centralized AI with more centralized AI" and "The concentration of power in AI is bad for us all." He voluntarily relinquished majority shareholder control to pursue decentralized AI. However, multiple reports indicate he was pushed out after months of investor pressure—Lightspeed VP called his mismanagement "severely undermined" confidence, and Coatue launched an internal investigation into his management.

Forbes investigations revealed Mostaque exaggerated his credentials and institutional affiliations. He claimed partnerships with UNESCO, OECD, WHO, and World Bank that those organizations denied. He exaggerated educational achievements and links to Amazon Web Services. A failed negotiation with Nvidia CEO Jensen Huang ended in disaster: "Under Jensen's microscopic questions, Emad just fell apart," a source told Forbes. Stability AI also faced accusations of attacking rival Midjourney by scraping their platform, temporarily bringing down their service.