Former CEO and co-founder of Stability AI. Resigned in March 2024 amid investor pressure, credibility controversies, and financial mismanagement allegations. Gave up controlling shares by October 2024.
On March 23, 2024, Emad Mostaque resigned as CEO of Stability AI following months of pressure from investors including Lightspeed and Coatue. Investor Lightspeed said Mostaque's mismanagement had 'severely undermined' confidence. The company was spending $8 million monthly with no path to profitability, faced unpaid bills nearing $100 million, and key researchers who developed Stable Diffusion resigned in a 'mass exodus.' By October 2024, Mostaque gave up his controlling shares.
In July 2023, Stability AI co-founder Cyrus Hodes filed a civil lawsuit against Emad Mostaque claiming fraud. Hodes alleged Mostaque 'brazenly deceived' him about the company's value and purchased his entire 15% stake for $100 - a stake worth approximately $150 million five months later when Stability raised $101M at a $1B valuation. Hodes also accused Mostaque of embezzlement, including using company funds for personal rent.
A June 2023 Forbes investigation citing 30+ sources found Emad Mostaque misled investors about his educational background (claimed Oxford master's degree he never completed), overstated his role at a hedge fund (junior analyst, not key decision-maker), and made unsubstantiated partnership claims with the UN, WHO, World Bank, OECD, and government of Malawi - all of which denied partnerships. Multiple sources also told Bloomberg he claimed to have been a 'secret agent' in the UK government.