Adobe paid $20 billion to acquire Figma in 2022. Regulators in the European Union and the United Kingdom killed the deal at the end of 2023, citing competition concerns. Adobe walked away, handed Figma a $1 billion breakup fee, and returned to running its business as if nothing had happened. But the fallout from that abandoned deal has quietly complicated Adobe’s position in a market it has dominated for decades.
The Figma saga did something that years of smaller competitors could not: it made designers, developers, and product teams take a hard look at their Creative Cloud subscriptions and ask whether Adobe was still the only option worth paying for.
That question is now costing Adobe more than the breakup fee ever did.
What the Failed Acquisition Actually Revealed
When Adobe moved to buy Figma, the intention was transparent enough – Figma had built a browser-based, collaborative design tool that was pulling serious talent away from Adobe XD, Adobe’s own UX design product. Rather than compete, Adobe chose to acquire. Regulators read that move as an admission that Adobe could not beat Figma on its own, and they were not wrong. Adobe quietly discontinued XD after the deal collapsed, which confirmed what the market had already suspected: the company had given up on building a credible rival.
Discontinuing XD sent a signal that Adobe’s Creative Cloud, for all its breadth, had gaps it was not prepared to fill through internal development alone. Designers who had been evaluating Figma as a complement to Adobe tools began treating it as a replacement. Product teams that were already using Figma for wireframing and prototyping had less reason to maintain Adobe subscriptions at all. The failure of the acquisition did not just leave Adobe without Figma – it left Adobe looking like a company that had run out of ideas for the product category Figma owns.
Figma, for its part, came out of the regulatory process with $1 billion in cash, full independence, and a credibility boost that no marketing campaign could have manufactured. The company has since accelerated its product development, adding features that push further into territory Adobe once considered its own. Figma’s move into presentation tools, AI-assisted design, and developer handoff workflows puts it in direct competition with multiple Adobe products simultaneously.
Creative Cloud’s Grip Is Loosening at the Edges
Creative Cloud’s business model has always depended on a combination of product lock-in and professional inertia. Designers learn Photoshop and Illustrator early in their careers, build years of muscle memory, and rarely switch unless the pain becomes acute. That inertia kept subscription revenue stable even as individual products aged and newer tools from smaller competitors chipped away at specific use cases. The bundle strategy – paying for the full suite rather than individual apps – kept users inside the ecosystem even when they only actively used two or three tools.
What has changed is the professional culture around tools. A generation of designers and developers who built their workflows inside Figma, Notion, Linear, and other browser-native products are far less attached to installed software and annual subscription cycles. When this cohort moves into senior roles and starts influencing purchasing decisions, the institutional loyalty that kept Creative Cloud subscriptions on company credit cards becomes harder to maintain. Adobe is not losing its existing base overnight, but the incoming generation of creative professionals is not arriving pre-sold on the ecosystem the way earlier ones did.
Adobe’s subscription revenue held up through 2023 and into 2024, but the company has had to work harder to justify price increases. Creative Cloud pricing has gone up multiple times in recent years, and each increase has triggered visible frustration from freelancers and small studios who increasingly see the cost as misaligned with how many tools they actually use. Some are dropping to lower-tier plans. Others are mixing Adobe subscriptions with standalone tools – paying for Photoshop while doing interface work entirely in Figma, running video projects in DaVinci Resolve instead of Premiere. The bundle is losing its grip not because users are leaving, but because they are navigating around it.
Adobe’s AI Bet Is the Next Pressure Point
Adobe has invested heavily in Firefly, its generative AI image and video tool built into Creative Cloud. The pitch is straightforward: AI features trained on licensed content, safe for commercial use, integrated directly into the tools professionals already use. That commercial safety angle is genuinely useful for agencies and brands worried about copyright exposure from other AI image generators. Firefly gives Adobe a real argument for keeping subscriptions active among enterprise and agency clients who cannot afford legal ambiguity around AI-generated assets.
The problem is that the AI landscape moves faster than Creative Cloud’s update cycle can match. Midjourney, Runway, and a growing list of specialized AI tools are adding capabilities at a pace that Adobe’s integrated approach struggles to keep up with. A video editor who needs specific motion AI features is not waiting for Premiere’s next update – they are opening a browser tab and using whatever tool does the job today. Adobe’s advantage is integration and legal safety; its disadvantage is speed and specialization. For enterprise clients, that tradeoff often favors Adobe. For independent creators and smaller studios, it often does not.
Adobe has also started gating AI features behind credit systems and higher-tier subscriptions, a monetization approach that has generated sustained complaints across design and creative communities online. Charging separately for AI usage on top of an already expensive subscription creates friction precisely among the users Adobe most needs to retain – active, high-output creators who are also the most likely to explore alternatives.
Adobe’s core products remain excellent at what they do, and Photoshop and Illustrator are not disappearing from professional workflows anytime soon. But the company spent two years and $1 billion trying to buy its way out of a competitive problem it could not engineer its way through, and now it faces that same problem with less credibility and a cleaner, better-funded Figma operating freely in the market. The next product cycle Adobe needs to win is the one it failed to acquire.
