As design firm Figma rolls out the first major artificial intelligence upgrade to its platform, CEO and co-founder Dylan Field won’t be giving customers the benefit of the doubt amid AI adoption rates, demand curves and consumer hype. Come any chance. Figma is currently paying for AI upgrades rather than trying to charge customers.
“We’re going to carry the cost into 2024 because we don’t know yet how people are going to use these features. We don’t know how many of you are going to care, we don’t know how good they’re going to get,” Field said Thursday at the company’s Config meeting. Said in an interview with CNBC’s Deirdre Bosa. “Look at the usage of the beta, see what the cost is, and then you can start from there to determine where the pricing should be.”
Figma’s UI3 redesign was released in limited beta on June 26 with a waitlist for other users, including a new toolbox called “Figma AI.”
About six months after antitrust scrutiny forced AdAdobe to cancel its acquisition of Figma, the redesign that incorporates broad artificial intelligence capabilities becomes another competitive wedge against AdAdobe and Canva, another highly valued design startup that has moved more into the enterprise. The field market valuation is approximately US$25 million.
Canva ranks No. 6 on this year’s CNBC Disruptor 50 list, while Figma ranks No. 26.
The rapid growth of Figma’s integrated product design capabilities accessed through a browser has become a competitor to Adobe’s product line. This core innovation in Figma is similar to how Google Docs is shared and revised, replacing designers working in silos on the desktop app while trying to keep track of various file versions. Known for its easy-to-use software tools, Canva continues to expand, pursue business customers, integrate artificial intelligence and compete more aggressively with Adobe.
In a blog post this week, Figma emphasized the need to focus on technology that meets user needs rather than abandoning popular ideas, including artificial intelligence implementations such as chat boxes. “These features can feel tacked on and distract from what’s important,” a group of the company’s executives wrote.
“What we care about is making sure that we’re not just sprinkling AI fairy dust on it, but actually building AI capabilities into the product to make designers’ lives better,” Field told CNBC.
“It definitely feels like a race to me,” Field said, referring to the AI modeling industry, whose clients include Internet companies that have been quick to adopt AI capabilities. He said it could also be a race to beat similar companies to gain market share with the AI features consumers want most. Figma is feeling the heat of AI.
“As an independent company, it’s all about how we build products for our audience, which is the people who make the products,” Field said.
In June, Adobe shares posted their biggest gains since the 2020 coronavirus bull market, following better-than-expected financial results and the integration of artificial intelligence into its product Firefly and its enterprise business platform.
“The only constant is change,” Field told CNBC. He added that as large language models from Amazon and Microsoft-backed OpenAI, including Meta, get faster, “prices are coming down.”
UI3 for Figma incorporates a variety of generative AI capabilities to simplify and standardize the creative process from page and app ideation to execution. Input page instructions can create aesthetics and prompt design ideas. It also streamlines the design of Figjam, its original AI-powered workspace that generates agendas and allows web design teams to collaborate. A new product called “Figma Slides” is a potential competitor to Google Slides and Canva. Figma’s design tools are embedded in enterprise products from companies like Google and Oracle.
The artificial intelligence competition is another step towards a potential IPO for Figma after the Adobe deal was blocked. In May, Figma announced a tender offer that allowed current and former employees to sell shares at a valuation of $12.5 billion, a 25% increase from the 2021 financing but well below AdAdobe’s $20 billion acquisition offer. Canva also recently completed a deal that allowed early employees and investors to cash out at a valuation of $26 billion, well below its peak private value of $40 billion. Like Figma, it’s a highly anticipated IPO candidate.
“Either an M&A or an IPO, we tried one or the other, so you can probably guess which one we’re going to take in the future,” Field said.
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