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The report, published over the weekend, claims Mostaque misled people — including investors — about receiving a master’s degree from Oxford University, as well as a deal with Amazon — which referred to it as a strategic partner — but was nothing more than a standard cloud computing leasing deal.
The report also detailed issues related to payroll uncertainty, unpaid invoices, and monetary transactions between Stability and accounts controlled by Mostaque and his wife. A Stability spokesperson said those were actually loans the couple made to and from the company.
Controversy and big money
This isn’t the first time the London-based startup has found itself in the headlines.
Last fall, Stability AI locked up a $101 million raise led by Coatue, Lightspeed Venture Partners and O’Shaughnessy Ventures. The company did not release a valuation at the time, but Bloomberg reported the new cash infusion valued the company at around $1 billion.
It also was reported at that time the startup was looking to raise an additional $1 billion of capital at a multibillion-dollar valuation.
Those funding talks have stalled, per Forbes.
Stability is an AI-driven visual art startup. At the time of its fundraising, the company claimed its consumer-facing product DreamStudio had grown to more than a million registered users who have created more than 170 million images.
Illustration: Dom Guzman
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