Adobe Inc.’s $20 billion plan to buy digital-design startup Figma is in doubt, according to a recent report by Bloomberg. Over a year since the announcement, the deal remains in limbo, facing regulatory hurdles. Meanwhile, Adobe’s gaze has shifted toward the burgeoning realm of AI.
Adobe’s shift in priorities to AI
At Adobe’s latest Los Angeles conference, AI was the star. New AI features in products like Photoshop took center stage. Figma got little attention. This was a marked departure from the previous year when Figma’s CEO, Dylan Field, shared the stage with Adobe executives, discussing potential collaborations.
Michael Turrin, an analyst at Wells Fargo, observed, “A lot has changed since Figma was announced — at that time there was a view that Adobe was running out of growth and needed something new.”
However, Adobe’s top brass maintains their commitment to the acquisition. The primary reason for the silence? Regulatory challenges. The US Department of Justice is seeking additional information, with reports suggesting a potential lawsuit to block the acquisition. European and UK regulators are also scrutinizing the deal.
Adobe General Counsel Dana Rao emphasized the company’s continued interest in Figma, noting that collaboration is off the table until the deal finalizes. Adobe CEO Shantanu Narayen echoed this sentiment, highlighting the company’s internal innovations as the reason for the limited discussion on Figma at the conference. Despite the subdued presence, Figma representatives, including its CMO and business development head, attended the event.
Clock ticking on the deal
With the acquisition slated to close by March’s end, the pressure is mounting. If the deal doesn’t materialize by then, Adobe could be on the hook for a hefty $1 billion breakup fee, as per merger agreements. Bloomberg Intelligence’s Jennifer Rie suggests that meeting this tight deadline might be challenging, especially if regulators oppose the acquisition.
Investor sentiment has been mixed. The announcement initially led to a significant dip in Adobe’s market value. However, with Adobe’s renewed focus on AI, its stock has surged by over 65% this year.
The post Adobe’s AI ambitions cast doubt on potential Figma acquisition appeared first on ReadWrite.