Hodes filed the lawsuit in July, citing a delayed and largely unsuccessful COVID-19 project due to Mostaque’s alleged misconduct and lack of transparency. Stability AI attained “unicorn status” following the unveiling of its text-to-image generator shortly after Hodes sold his shares in August 2022.
Hodes has requested the court to void or rescind the share purchase agreements, award damages, and require Stability AI and Mostaque to disgorge benefits from their alleged wrongdoing.
Responses from Stability AI and Hodes’ counsel were not immediately available.
The case is Cyrus Hodes v. Mohammad Amad Mostaque et al., case number 4:23-cv-03481, in the U.S. District Court for the Northern District of California.
