As design company Figma launches its first major AI upgrade for its platform, CEO and co-founder Dylan Field is taking no chances with customers amid steep AI adoption curves and consumer demand and hype. Figma is paying the cost of the AI upgrade for now instead of trying to charge customers.
“We’ll eat the cost for 2024, because we don’t yet know how users will use the features. We don’t know how many of you will care, we don’t know how good they’ll become.” Field said in an interview with CNBC’s Deirdre Bosa on Thursday while speaking from the company’s Config conference. “Look at what the usage is in beta, see what the cost is, and then you can go from there in terms of where the pricing should be.”
Figma’s UI3 redesign, released in limited beta on June 26 with a waiting list for additional users, includes a new toolkit called “Figma AI.”
About six months after antitrust scrutiny forced Adobe to scrap its acquisition of Figma, the redesign that broadly incorporates artificial intelligence functionality is another competitive wedge in a battle with Adobe and another valuable design startup, Canva, which has gone further into the market business, with a valuation of about 25 billion dollars.
Canva ranked No. 6 on this year’s CNBC Disruptor 50 list, while Figma ranked No. 26.
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 key Figma innovation, similar to how Google Docs is shared and reviewed, replaces designers working in silos on desktop apps while struggling to keep track of various file versions. Canva, known for its easy-to-use software tools, continues to scale, seek professional accounts, incorporate artificial intelligence and compete 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 such as chat box functions. “There is a risk that these features will feel tacked on and distract from what matters,” wrote a group of top company executives.
“What we’re interested in is making sure we’re not just throwing AI dust on top, but actually baking AI functionality into the product to make a designer’s life better,” Field told CNBC.
Figma is feeling the heat of AI.
“It certainly looks like a race to me,” Field said, referring to the big AI language modeling industry, whose customers include web companies that are fast adopting AI features. Adopting the AI features most desired by consumers to overtake similar companies for market share may also be a race, he said.
“It’s about, as an individual company, how do we build for our audience, which is the people who build products,” Field said.
In June, Adobe shares rose more than the 2020 Covid bull market after better-than-expected financial results and the integration of artificial intelligence into its Firefly product and business platform.
“The only thing constant is change,” Field told CNBC. As big language models from Amazon and Microsoft-backed OpenAI, including Meta, among others, get faster, “prices are coming down,” he added.
Figma’s UI3 integrates various AI creation capabilities to streamline and standardize creative processes from page and app ideation to execution. Typing instructions for a page can create aesthetics and spark design ideas. He also refined the design for Figjam, his original AI-powered workspace that creates agendas and enables web design teamwork. A new product called “Figma Slides” is a potential competitor to Google Slides and Canva. Figma’s design tools are integrated into enterprise offerings from companies such as Google and Oracle.
The AI competition is another step on the path to a potential IPO for Figma following the aborted Adobe deal. In May, Figma announced a tender offer to allow current and former employees to sell stock at a $12.5 billion valuation, with the valuation rising 25% from a 2021 fundraiser, but well below Adobe’s takeover offer 20 billion dollars. Canva also recently completed a transaction to allow early employees and investors to cash in at a roughly $25 billion valuation — well below its $40 billion private equity peak. Like Figma, it is also a highly anticipated IPO candidate.
“It’s either an M&A or an IPO, and we’ve tried one of those, so you can probably guess which one is in our future,” Field said.
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