Dusseldorf, San Francisco From November, the software provider Adobe will charge a fee for images generated using its artificial intelligence (AI). The company is introducing so-called “generative credits” for its Firefly offer, which cost five cents per AI image, depending on the subscription model and usage. In the future, advertising agencies, creative people and marketing experts will have to expect a price increase for subscriptions of around ten percent, Adobe has now announced.
Firefly is an AI program that can be used with existing Adobe offerings such as Photoshop or Illustrator and, among other things, can supplement or create new images with AI.
It’s a far-reaching decision, the previously free Firefly is very popular. Since its launch last March, the program has produced more than two billion images. Since then, Adobe shares have increased by around half and gained $180 billion in market value. Shantanu Narayen, CEO of Adobe, speaks of the “great importance” of the technology for the company.
The commercialization of Firefly heralds a new phase in AI. Although image generators such as Stable Diffusion or Midjourney also charge money for use, Adobe has great market power: Photoshop, Creative Cloud and Illustrator are widely used image editing software, which together have a global market share of 79 percent, according to market researcher Enlyft.
Behind the Firefly announcement is also a reinvention of Adobe. The 41-year-old software company has been growing moderately for many years and is considered to be rather quiet and conservative in Silicon Valley. But AI is not only changing the business model, it is threatening to cannibalize the business of Adobe customers – after all, anyone can now create images in a matter of seconds that would previously have taken illustrators or graphic designers hours to create.
Adobe decided to take a risky step and develop AI on its own. “Our development and product teams worked even more closely together than usual,” said Ashley Still, head of digital media at Adobe. The group also had to invest a lot of money in computing capacity and infrastructure. “Not everyone was initially enthusiastic about the change in course,” says Ely Greenfield, head of technology at Digital Media.
Adobe relies on legal security
In contrast to start-ups in the AI industry, Adobe has an advantage: the company has had good relationships with the creative industry for years and is well versed in the legal framework. While the first artists are suing Midjourney and Stable Diffusion, Adobe promises to respect copyrights and only train their models based on images and videos that are legally usable. The metadata should be attached to each image like a kind of label.
Adobe also announces bonus payments to photographers or illustrators who produce images for Adobe Stock. The annual bonus depends on the number and use of the images; Adobe did not want to say anything about the amount. “It will be significant,” promises Ashley Still.
>> Read also: What companies need to consider when introducing ChatGPT
Because this motivates photographers to submit images to Adobe Stock, Adobe not only increases the offering for customers, but also increases the database for its AI model – which in turn can produce better results through more targeted training.
Creative people are “big worried” about AI
David Wadhwani, chief business officer of Adobe Digital Media, raves about a “new era of creative expression” and “stunning possibilities” given the possibilities for creative work with AI.
Others are less enthusiastic. Creative professions are facing a major upheaval. “The cultural sector is facing a fundamental change,” says Olaf Zimmermann, managing director of the German Cultural Council, and speaks of “great concerns” among the majority of its members.
Adobe observers do not share this concern – or no longer do. Analyst Keith Weiss from Morgan Stanley criticized in an analysis that Adobe initially missed the trend towards artificial intelligence. The company has now caught up, and the analyst assumes that Adobe will be able to tap into new customer groups. He calculated that AI capabilities could make creative industry professionals 30 percent more efficient. This would save an average of around $1,500 a month per person.
Firefly was the turnaround on the stock market
However, Adobe has only been recognized as an AI major for a few months. In 2022, for example, the share lost around 40 percent. While AI-supported image generators from other companies attracted more and more attention, the Adobe papers were viewed critically.
CEO Narayen tried to break free last February when he announced the $20 billion acquisition of the design platform Figma. However, the move did not lead to more confidence among investors, but rather deterred them. Prominent analysts such as Michael Turrin from the US bank Wells Fargo described the purchase price as simply too high. Adobe shares lost 17 percent of their value in one day – the biggest drop since 2010.
The first speculations were already making the rounds that CEO Narayen might have made a mistake. The manager has been at Adobe for 25 years, including 15 years as CEO. But instead of backtracking, he increased his focus on AI.
The turnaround came with Firefly. Adobe’s pilot project was the poster child for its AI ambitions. It speaks more than a hundred languages. The first demonstrations of the software not only impressed experts from the photo and video industry. They also led to a rethink on the stock market. Adobe no longer seemed to be left behind but was now catching up.
A laborious reorientation was necessary
The new strategy was preceded by a strenuous internal process, reveals digital media technology director Ely Greenfield in an interview with Handelsblatt. He is responsible for products like Firefly. Although he worked at Adobe for two decades, he left the company in 2017 and returned five years later.
“I came back because artificial intelligence is disrupting things,” says Greenfield. “Adobe was used to investing in good people. For our latest push, we had to learn to also put a lot of money into infrastructure,” explains Greenfield.
Behind AI applications like Firefly are huge AI models that have to be trained and adapted with a lot of computing capacity. “It was a huge investment in a way that Adobe had never done before,” he says. However, he did not want to provide any information about the amount of AI investments.
More: AI is flooding the internet with creative content