Figma CEO says AI upgrades are 'burdensome' for customers

As design company Figma rolls out the first major AI upgrade for its platform, CEO and co-founder Dylan Field isn't taking any chances on customers amid AI's rapid adoption and demand curve and consumer hype. For now, Figma is footing the bill for the AI ​​upgrade itself rather than charging customers.

“We're covering the costs through 2024 because we don't know yet how people are going to use it. We don't know how many people are going to be interested, how good it's going to be,” Field said in an interview with CNBC's Deirdre Botha at the company's Config conference on Thursday. “We'll see how it's used in the beta, we'll see what the costs are, and we can determine pricing from there.”

Figma's UI3 redesign will be released in limited beta on June 26th with a waitlist for additional users, and includes a new toolbox called “Figma AI.”

Nearly six months after an antitrust investigation forced Adobe to halt its acquisition of Figma, the redesign, which broadly integrates AI capabilities, is a new competitive wedge in the fight against Adobe and Canva, another highly-valued design startup that is making inroads in the enterprise market and is valued at about $25 million.

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

Figma's all-in-one product design capabilities, accessible via a browser, have grown rapidly to compete with Adobe's product lineup. Figma's core innovation, similar to the way Google Docs shares and modifies, replaces designers who struggle to keep track of different file versions while siloed in desktop apps. Known for its easy-to-use software tools, Canva continues to scale as it goes after business accounts, integrates AI, and ramps up competition with Adobe.

In a blog post this week, Figma stressed its focus on technology that meets user needs, rather than discarding trendy ideas, including AI implementations like the chat box feature. “These features risk feeling like an afterthought and distracting from what's important,” a group of the company's top executives wrote.

“Our focus is not just to sprinkle AI magic dust on products, but to actually build AI capabilities into products to make designers' lives better,” Field told CNBC.

More CNBC Disruptor 50 2024 Coverage

“It definitely feels like a race to me,” Field said, referring to the AI ​​modeling industry, whose customers include web companies that are rapidly adopting AI features. It could also be a race to introduce the AI ​​features that consumers want most and beat out similar companies for market share, he said. Figma is feeling the heat on AI.

“It's about how we, as individual companies, build for our customers, the people who make the products,” Field said.

In June, Adobe shares recorded their biggest gain since the 2020 pandemic bull market on the back of better-than-expected financial results and the integration of AI into its Firefly product and enterprise business platform.

“The only constant is change,” Field told CNBC, adding that as large-scale language models from companies like Amazon- and Microsoft-backed OpenAI and Meta get faster, “the prices are coming down.”

Figma's UI3 incorporates a range of generative AI features to streamline and standardize the creative process, from ideation to execution of a page or app. Enter the instructions for your page and it will generate aesthetics and prompt design ideas. It also streamlines design with Figjam, a unique AI-powered workspace that generates agendas and enables teamwork for web design. A new product called “Figma Slides” is a potential competitor to Google Slides and Canva. Figma's design tools are built into enterprise services from companies like Google and Oracle.

The AI ​​competition marks another step on the road to a potential IPO for Figma after its deal with Adobe fell through. In May, Figma announced a tender offer that would allow current and former employees to sell shares at a valuation of $12.5 billion. That valuation is up 25% from its 2021 fundraising but well below Adobe's $20 billion acquisition offer. Canva also recently completed a deal that would allow early employees and investors to sell shares at a valuation of $26 billion, well below the company's peak private valuation of $40 billion. Like Figma, Canva is also highly anticipated as an IPO candidate.

“It's either M&A or an IPO, and we've tried both, so you can probably guess what our future holds,” Field said.

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