Generative artificial intelligence company Stability AI failed to pay cloud providers last year as it struggled to bring in revenue to cover model development.

In a lengthy profile of the downfall of ousted CEO Emad Mostaque, Forbes reports that spiraling compute costs and mismanagement have caused chaos at the one-time industry darling.

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– Sebastian Moss

According to an internal October financial forecast seen by Forbes, Stability was on track to spend $99 million on compute in 2023. But it noted that Stability was “underpaying AWS bills for July [by $1 million]” and “not planning to pay AWS at the end of October for August usage [$7m].”

There are also September and October Amazon bills, alongside $1m owed to Google Cloud and $600,000 to AI cloud data center company CoreWeave. It's not known how much the company currently owes.

Emad Mostaque, who stepped down as CEO in March, previously said that Stability's AWS cluster was one of the world’s 10 largest supercomputers.

Last year, Intel said that it would build its own AI supercomputer using Gaudi2 accelerators, with Stability as the anchor tenant. The system is not mentioned in the Forbes report, but the publication notes that Intel has invested just $20m of a previously reported $50m investment, potentially due to Stability's instability.

Stability has struggled to turn its text-to-image generator into a sustainable revenue source and failed to develop AI models for nation-states, like it once promised. Instead, it has considered another way of bringing in funds: Reselling its compute.

The company told investors it would do this as a managed services offering, with its October financial report projecting that the effort would bring in $139 million in 2024 — some 98 percent of its revenue.

It was also looking into the possibility of reselling a cluster of Nvidia A100 chips, leased via CoreWeave, to the venture capital firm Andreessen Horowitz.

“It was under the guise of managed services, but there wasn’t any management happening,” one of the employees told Forbes.

“The line internally was that we are not reselling compute,” another former employee said. “This was some of the dirtiest feeling stuff.”

It's not known if reselling Amazon's compute with violate the terms of Stability’s contract with AWS.