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The rise in valuation of AI based image synthesis companies like Stability AI and Genesis

  • Stability AI, the startup behind Stable Diffusion, raises $101M

  • Genies raises $150M at over $1B valuation for metaverse avatars

Stability AI, the company funding the development of open-source image, video and music generating systems like Stable Diffusion, raised $101 million in a funding round led by Coatue and Lightspeed Venture Partners with participation from O’Shaughnessy Ventures LLC. The tranche values the company at $1 billion post-money and comes as the demand for AI-powered content generation accelerates worldwide due to Metaverse explosive growth.

Stability AI is the brainchild of CEO Emad Mostaque and located in Silicon Valley and London. Mostaque co-founded and bootstrapped Stability AI in 2020, motivated both by a personal fascination with AI and what he characterized as a lack of “organization” within the open-source AI community.

Stability AI uses a huge cluster of more than 4,000 Nvidia A100 GPUs running in AWS, to train AI systems, including Stable Diffusion. The open-source release of Stable Diffusion has been used to create objectionable content like graphic violence and pornographic, nonconsensual celebrity deepfakes. And Getty Images banned the upload of content generated by systems like Stable Diffusion, over fears of intellectual property disputes. Recently, govt has stepped in to address the release of “unsafe AI models” that “do not moderate content made on their platforms.”

Stability AI has taken a lackluster approach to moderation till now, including filtering tools with the open-source Stable Diffusion package but allowing users and companies to deploy the system how they wish so long as they follow the terms of the company’s license. Stability AI plans to make money by training “private” models for customers and acting as a general infrastructure layer. It also offers a platform and API, DreamStudio, through which its models can be accessed by individual users. DreamStudio has more than 1.5 million users who’ve created over 170 million images and Stable Diffusion has more than 10 million daily users “across all channels.”

Meanwhile, the open-source version of Stable Diffusion has been downloaded more than 200,000 times, according to a press release published by Stability AI this morning. Beyond Stable Diffusion, Stability AI claims to have other commercialize projects in the works, including AI models for generating audio, language, “3D” and even video. One of those is the aforementioned Dance Diffusion, an algorithm and set of tools that can generate clips of music by training on hundreds of hours of existing songs.

Genies Inc., a Silicon Valley based A.I company makes avatars that people can customize to their own needs, and it also provides celebrities with avatars that can be used as stand-ins for them at online events. The company also sees them as enabling people to jump around from different places in the metaverse while keeping the same identity. It had raised $150 million in funding from Silver Lake, with participation from Bond, NEA and Tamarack Global.

Genies App allow users to create fully personalized avatars to be used in apps such as Giphy, iMessage, and Instagram. Genies has utilized web3 craze, by debuting an NFT storefront with NBA Top Shot maker Dapper Labs. The startup is looking to capitalize momentum behind NFT profile pic collections and ENS (.eth) handles to build out a network of NFT-based avatar identity products.

Bob Iger former Disney CEO has taken a seat on the board of the company. The company released its NFT storefront, “The Warehouse.” The storefront will be open on Dapper’s Flow blockchain and allows users to download the Genies Studio app to create their own avatars and buy digital fashion items to dress them.

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