AI Co-Founder Alleges Deception in $100 Stake Sale
Cyrus Hodes, a second person claiming to be a cofounder of generative AI startup Stability AI, has filed a lawsuit against the company and its CEO Emad Mostaque, alleging fraud and embezzlement. Hodes claims that Mostaque misled him into selling his 15% stake in the business for $100, just months before Stability AI raised over $100 million at a $1 billion valuation. The lawsuit also accuses Mostaque of destroying evidence and embezzling funds from external investors. This lawsuit follows a similar case in which another individual claimed that Mostaque reneged on an agreement to grant him a 10% cofounder stake in the company.