I don’t think I’m getting your point here, SD is superior to Dall-e almost in every way.

The pattern academia -> commerce is well known (and not in itself evil). At some point in the past decade any ML/AI academic that could spell backpropagation got poached (many from European universities).

Once a domain proves short-tern lucrative, business is more than happy to invest but typically with very pragmatic targets. The recent reorgs in said commercial teams being point in case.

That's what called innovation I guess. Innovation introduced by public institutions is rather an exception than a rule - e.g. development of the internet infrastructure was funded publicly at first. What happens normally is that public institutions do fundamental research and businesses innovate. In case of AI businesses seem to be ahead even in fundamental research presently.