Stability AI cofounder sues CEO for claiming he was duped into selling stake for $100

A Stability AI cofounder on Thursday sued the artificial- intelligence startup and its chief executive, claiming they defrauded him into selling his 15% stake for $100 just three months before the company reached a $1 billion market valuation.

In a complaint filed in San Francisco federal court, Cyrus Hodes said CEO and cofounder Emad Mostaque convinced him Stability AI was “essentially worthless” even as Mostaque worked on what would become a popular image generator, Stable Diffusion.