Stability AI names Prem Akkaraju CEO and raises new funding

A new chief executive

On 25 June 2024, Stability AI announced that Prem Akkaraju had been appointed chief executive officer with immediate effect. Akkaraju had previously been chief executive of Weta Digital, a visual-effects company.^[1] The same announcement said that Sean Parker, a former president of Facebook, had become executive chairman.^[1]

A chief executive runs a company's day-to-day operations and answers to the board. A chairman leads the board itself; an executive chairman, unlike a non-executive one, also takes part in management. Announcing the two appointments at once means the company changed both its top manager and the person heading its board in a single step.^[1]

The investment

The appointments came with news of new investment. The institutional investors named were Greycroft, Coatue Management, Sound Ventures, Lightspeed Venture Partners and O'Shaughnessy Ventures. Individual investors included Eric Schmidt and Robert Nelsen.^[1][4]

Stability AI did not disclose the amount. Bloomberg reported that the round raised $80 million.^[2][3] The company called the funding a closed initial round of investment, meaning the round was completed rather than left open for further commitments.^[4]

The board

The company said its board included Dana Settle, co-founder and managing partner of Greycroft, and Colin Bryant, chief operating officer and general partner of Coatue Management.^[4] Both work at firms that joined the round, so investors took board seats as well as putting money in — a common arrangement when a young company raises outside capital.

How the company describes itself

In the same announcement, Stability AI described itself as a leading imaging, language, code and audio generative AI company.^[4] The phrase names four areas the company says it works in: images, text, code and audio. Generative AI means systems that produce new material — a picture, a paragraph, a piece of code, a stretch of sound — from a prompt or another input, rather than only sorting or scoring content that already exists. A company working across all four areas is claiming a broader range than one that only makes images or only makes text.

What the new chief executive said

Akkaraju said Stability AI was the backbone of the visual AI ecosystem and that the company would keep releasing open models while meeting corporate demand.^[4] The two halves of that sentence point in different directions. Open models are published in a form that other people can download, run and build on, which is how they spread beyond the company that made them. Corporate demand means paying business customers who need a model they can rely on, with support and predictable behaviour. Saying both at once is a statement about serving a reusable public layer and commercial clients at the same time.

What the announcement contains

Three things changed in one announcement: who runs the company, who chairs the board, and where the money comes from.^[1][4] The investor list mixes venture firms with named individuals, and partners from two of those firms appear on the board.^[1][4] The size of the round, by contrast, is not something the company stated; the $80 million figure comes from Bloomberg's reporting.^[2][3] Keeping those two kinds of information apart is useful when reading funding coverage, because a number attributed to a news organisation has a different status from a number in the company's own statement.