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Techrights
Posted by Roy Schestowitz on Apr 19, 2024
"Of course AI is a bubble. It has all the hallmarks of a classic tech bubble. Pick up a rental car at SFO and drive in either direction on the 101 – north to San Francisco, south to Palo Alto – and every single billboard is advertising some kind of AI company. Every business plan has the word “AI” in it, even if the business itself has no AI in it. Even as two major, terrifying wars rage around the world, every newspaper has an above-the-fold AI headline and half the stories on Google News as I write this are about AI. I’ve had to make rule for my events: The first person to mention AI owes everyone else a drink." - Cory Doctorow
> This has been a tough week on the layoffs front for AI startups.
> Troubled artificial intelligence startup Stability AI is laying off 10% — estimated to be about 20 people — of its workforce, per a report by CNBC.
> The layoffs are just the latest hit for the artificial intelligence-driven visual art startup.
> In 2022, 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.
> Stability AI is laying off staff in its search of steadier footing following the sudden departure of its CEO late last month.
> The British generative AI builder revealed the layoffs Wednesday night in a memo to staff obtained by The Register.
> "Following a review of the global team, we have determined the need to restructure parts of the business, which will sadly mean saying goodbye to some colleagues," the letter signed by interim co-CEOs Shan Shan Wong and Christian Laforte reads.
> The company burst onto Europe’s AI landscape in October 2022 when it raised a $101m Series A from high-profile investors Lightspeed and Coatue, off the back of the release of the popular image generation model Stable Diffusion, which it helped finance.
> Stability AI laid off 20 employees just a day after announcing the expansion of access to its new flagship model. This comes after weeks of upheaval that saw its founding CEO leave the company.
> CNBC reports that the layoffs at the UK-based AI company, which runs the Stable Diffusion text-to-image model, represent roughly 10 percent of its workforce. In a memo to staff, interim CEOs Shan Shan Wong and Christian LaForte say the decision to let go of employees is part of a “strategic plan to reduce our cost-base, strengthen support with our investors and partners, and enable teams to continue developing and releasing innovative products.”
> According to an emailed memo sent by interim Chief Operating Officer Shan Shan Wong and Chief Technology Officer Christian Laforte, the planned layoffs come as the company works to cut costs.
> "Following a review of the global team, we have determined the need to restructure parts of the business, which sadly means saying goodbye to some colleagues," the email reads.
> For months now, the company behind the Stable Diffusion AI image generator has been publicly falling apart — and now it's conducting mass layoffs.
> As CNBC reports, Stability AI — the creator of the image generator — laid off 20 people this week as the company attempts to "right-size" its business model in the wake of the publicity-garnering exit of its former CEO Emad Mostaque last month.
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