Adobe (US:ADBE) has long been the dominant design software product. Office workers know of it because it invented the PDF document, and almost every graphic designer will have used its products to design and edit pages, photos and videos. But for the first time in decades, its dominance is coming under threat.
Most people think of the big breakthrough in generative AI coming with the release of ChatGPT in December 2022. However, earlier that year a programme called Midjourney, which creates AI images from user prompts, was released. This technology had been around for a while, but the images produced tended to be mis-shapen and even disturbing. Midjourney marked the first time AI could reproduce the prompts accurately.
Adobe was clearly concerned: a few months later, it made a $20bn (£15.8bn) offer for cloud-based design tool Figma. Figma’s browser-based tool allows design teams to collaborate in real-time, and it had doubled its revenue in the previous year. But the offer represented a huge sum given the start-up made annual recurring revenue (ARR) of just over $400mn. Although Adobe investors (including Terry Smith) baulked, the company stood its ground. However, UK and EU competition regulators stepped in, and by the end of 2023 the deal had been abandoned.