As design firm Figma rolls out its first major AI upgrade for its platform, CEO and co-founder Dylan Field is taking no chances with customers amid steep AI adoption and demand curves and consumer hype. Figma is paying the cost of the AI upgrade for now instead of attempting to charge customers.
“We’re gonna eat the cost for 2024, because we don’t know how people are going to use the features yet. We don’t know how many of you will care, we don’t know how good they get,” Field said in an interview with CNBC’s Deirdre Bosa on Thursday speaking from the company’s Config conference. “Watch what the usage is in the beta, see what the costs are, and then you can go from there in terms of figuring out where pricing should be.”
Figma’s UI3 redesign, released in limited beta on June 26 with a waitlist for additional users, includes a new toolbox called “Figma AI.”
Roughly six months after antitrust scrutiny forced Adobe to call off its acquisition of Figma, the redesign that widely integrates AI functionality is another competitive wedge in a battle with Adobe and the other highly valued design startup, Canva, which has been moving more into the enterprise market, with a valuation around $25 billion.
Canva ranked No. 6 on this year’s CNBC Disruptor 50 list, while Figma ranked No. 26.
The fast growth of Figma’s all-in-one product design functions accessed over a browser has become competitive with Adobe’s lineup. This core innovation by Figma, akin to how Google Docs are shared and revised, takes the place of 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 up, going after business accounts, integrating AI, and competing more aggressively with Adobe.
In a blog post this week, Figma stressed a focus on technology that meets user needs rather than tossing out trendy ideas, including AI implementations, like chat box functions. “There’s a risk of these features feeling tacked on and distracting from what matters,” a group of top executives at the company wrote.
“What we care about is making sure we’re not just sprinkling AI fairy dust on top but rather really baking AI functionality into the product in order to make a designer’s life better,” Field told CNBC.
Figma is feeling the AI heat.
“It definitely feels like a race to me,” Field said, referencing the AI large language model industry, whose customers include web companies rapidly adopting AI features. Adoption of the most consumer-desired AI features to beat out similar companies for market share may also be a race, he said.
“It’s all about, as an individual company, how do we build for our audience, which is people making products,” Field said.
In June, Adobe shares surged 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 thing constant is change,” Field told CNBC. As the large language models from Amazon and Microsoft-backed OpenAI, among others including Meta, get faster, “prices are decreasing,” he added.
Figma’s UI3 incorporates various generative AI features to streamline and standardize creative processes from page and app ideation through execution. Typing in directives for a page can generate aesthetics and prompt design ideas. It also streamlined design for Figjam, its original AI-powered workspace that generates agendas and allows for web design teamwork. A new product called “Figma Slides” is a potential competitor to Google Slides and Canva. Figma’s design tools are embedded in enterprise offerings from companies including Google and Oracle.
The AI competition is another step on the path to a potential IPO for Figma after the thwarted Adobe deal. In May, Figma announced a tender offer to allow current and former employees to sell shares at a $12.5 billion valuation, with the valuation up 25% from a 2021 fundraising but well below Adobe’s $20 billion acquisition offer. Canva also recently completed a transaction to allow early employees and investors to cash out at the roughly $25 billion valuation — well below its peak private value of $40 billion. Like Figma, it’s also a highly anticipated IPO candidate.
“Either it’s M&A or IPO and we tried one of those, so you can probably guess as to the one that will be in our future,” Field said.
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