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The comparison between stable diffusion and Dolly 2 as AI models for text to image synthesis is explored in this video tutorial. Stable diffusion is open source and free, in contrast to Dolly 2 which is heavily censored and bad at generating anime related images. The video provides comparisons on prompt generations, pros and cons, and what to expect when using these models. While stable diffusion models are not public yet, it is only a matter of time before they are available for use.