The company reportedly raised around $50m from chip giant Intel last month, and the Stability spokesman added that recent investment in the business “underscores the confidence that investors have”.
Stability, which is valued at $1bn (£790m), is best known for its work on a popular AI image generator known as Stable Diffusion. The tool can generate pictures based on text prompts.
The company has been locked in several legal battles over its technology and has been sued by photography giant Getty Images for copyright breaches. Stability has called for the lawsuit to be dismissed.
News of the rift between Coatue and Stability comes days after a civil war at OpenAI, Stability’s well-funded US rival.
Board members at OpenAI ousted Sam Altman, its co-founder and chief executive, a little over a week ago before he staged a dramatic return with the support of key shareholders and hundreds of staff.
The tumult at OpenAI has raised questions over the governance of AI start-ups, amid calls from world leaders including Rishi Sunak for tighter regulation of the sector.
Separately, Stability confirmed that it had been approached by rivals about a potential takeover or merger but insisted it had rebuffed approaches.
A spokesman said: “While several parties have expressed interest in the purchase of Stability, we are not trying to sell the company and are focused on releasing leading models.”
A Coatue spokesman declined to comment.
