Jul. 17, 2023
Man says he cofounded Stability AI, tricked into selling out for $100
The plaintiff, Cyrus Hodes, alleges that Mostaque told him the London based company was “essentially worthless” in October 2021 and May 2022 as a means of purchasing his 15% share with the knowledge that a $101 million investment was imminent.
Stability AI Inc. CEO Mohammad Mostaque was sued in federal court in San Francisco by a man who says he is a co-founder of the company and was fraudulently induced to sell his share for $100 when it could soon be worth more than $500 million.
It is the second such lawsuit, but the previous one was withdrawn. A spokesperson for Stability AI said Friday, “The suit is without merit and we will aggressively defend our position.”
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