British AI specialist Stability AI is looking for a possible buyer. The search was reportedly triggered by an action by U.S. activist shareholder and venture capitalist firm Coatue Management.
Stability AI, known for its generative image tool Stable Diffusion, among others, has recently been searching for a possible buyer, according to Bloomberg. In the meantime, talks with possible candidates are said to have already taken place. Whether an acquisition deal will actually materialize is unknown.
Among the potential buyers mentioned are AI specialists Cohere and Jasper. These companies have declined to comment on the rumors. Stability AI itself confirms the interest from several companies, but also says it is now focusing on further growth first.
Argument with shareholder
The possible sale of Stability AI comes at a time when the AI specialist is having hefty discussions with one of its shareholders, the activist American investment company Coatue Management.
In a letter last month, this shareholder demanded the resignation of the AI specialist’s CEO Emad Mostaque. Things have been rumbling within Stability AI for some time, partly due to very large expenses, and this has led to the resignation of several key executives or team leaders.
The company is also embroiled in several lawsuits surrounding the violation of artists’ intellectual property.
Opposing shareholder interests
The letter was reportedly sent after Intel took a stake in the AI specialist. Venture capitalist Coatue Management itself is a major shareholder in Intel’s perennial competitor AMD. Whether these competing interests might have to do with the sale of the company is unknown and denied, Bloomberg writes.
The shareholder would also like more insight into the salaries received by CEO Emad Mostaque and other executives.
Just last year, Coatue Management led an investment round in Stability AI that ended up raising about $500 million. This investment round in turn led to unicorn status for the AI specialist.
Also read: Stability AI exec steps down, citing concerns over generative AI ‘exploitation’
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