Figma CEO says it’s ‘eating cost’ of AI upgrade for customers in 2024

Figma CEO on failed Adobe deal, startup landscape, big redesign with AI

As design firm Figma rolls out its first major AI upgrade to its platform, CEO and co-founder Dylan Field is taking no chances with customers amid steep AI adoption curves and consumer demand and clamor. Figma is paying the cost of the AI ​​upgrade for now instead of trying to charge customers.

“We will eat the cost for 2024 because we don’t know yet how people will use the features. We don’t know how many of you will care, we don’t know how good they will be.” Field said in an interview with CNBC’s Deirdre Bosa on Thursday speaking from the company’s Config conference. “See what the usage is in the beta, see what the costs are, and then you can go from there to figure out where the price should be.”

Figma’s UI3 redesign, released in limited beta on June 26 with a waiting list for other users, includes a new toolbox called “Figma AI.”

Roughly six months after antitrust scrutiny forced Adobe to cancel its acquisition of Figma, the redesign that broadly integrates AI functionality is another competitive wedge in a battle with Adobe and fellow highly regarded design startup Canva, which has moved more many in the enterprise. market, with an estimate of about 25 billion dollars.

Canva was ranked 6th on this year’s CNBC Disruptor 50 list, while Figma is ranked 26th.

The rapid growth of Figma’s all-in-one product design functions, accessed through a browser, has made it competitive with Adobe’s line. This core innovation from Figma, similar to the way Google Docs are shared and reviewed, takes the place of designers working in silos on desktop applications while trying to keep track of different versions of files. Canva, known for its easy-to-use software tools, continues to grow, pursuing business accounts, integrating AI and competing more aggressively with Adobe.

In a blog post this week, Figma emphasized a focus on technology that meets user needs rather than throwing out trendy ideas, including AI implementations like chat box functions. “There is a risk that these features will feel in the way and distract from what matters,” wrote a group of senior executives at the company.

“What we care about is making sure we don’t just sprinkle AI fairy dust on top, but instead really bake AI functionality into the product to make a designer’s life better,” Field said. for CNBC.

More coverage of the 2024 CNBC Disruptor 50

Figma is feeling the AI ​​heat.

“It definitely feels like a race to me,” Field said, referring to the big AI language model industry, whose customers include Internet companies that are rapidly adopting AI features. Adopting the most desired AI features to beat out similar companies for market share can also be a race, he said.

“It’s about, as an individual company, how we build for our audience, which is the people who make the products,” Field said.Â

In June, Adobe shares rose the most since the Covid bull market of 2020 after better-than-expected financial results and the integration of AI into its product, Firefly, and its enterprise business platform.

“The only constant is change,” Field told CNBC. As major language models from Amazon and Microsoft-backed OpenAI, including Meta, among others, get faster, “prices are coming down,” he added.

Figma’s UI3 includes various generative AI features to simplify and standardize creative processes from page and app ideation to execution. Typing directives for a page can generate quick design aesthetics and ideas. He also streamlined the design for Figjam, his original AI workspace that generates agendas and allows web design teamwork. A new product called “Figma Slides” is a potential competitor to Google Slides and Canva. Figma design tools are embedded in enterprise offerings from companies including Google and Oracle. ÂÂ

The AI ​​competition is another step on the road to a possible IPO for Figma after the broken Adobe deal. In May, Figma announced a tender offer to allow current and former employees to sell shares at a valuation of $12.5 billion, valued at 25% from a 2021 fundraising, but well below the $20 billion takeover offer. Adobe dollars. Canva also recently completed a transaction to allow employees and early investors to cash in at a roughly $25 billion valuation — well below its peak private value of $40 billion. Like Figma, it is also a long-awaited IPO candidate.

“It’s either M&A or IPO, and we tried one of those, so you can probably guess what’s in our future,” Field said.

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