Stable Diffusion converts text prompts into images through a trained neural network, sitting in the same space as DALL-E and Midjourney but with a crucial difference: the model weights are publicly available. This means you can run it on your own hardware, modify it, or use it through Stability's API and web interface. The free tier lets you generate images without payment, though heavy use and commercial applications typically require paid API access. The real trade-off: quality and speed lag behind closed competitors, and the interface and documentation assume some technical comfort.