Adobe is taking gen. AI head on with suite of new AI programs
Creative software developer Adobe (ADBE) kicked off its Adobe Summit — Digital Experience Conference in Las Vegas on Tuesday, March 26. The three-day event will showcase all the new ways Adobe is using generative AI and other advanced tech to enhance customer experiences. One such piece of technology unveiled at the conference is Adobe's new Firefly Services, which will increase the speed and scale of production for AI-generated branded content.
Adobe's President of Digital Media David Wadhwani joins Yahoo Finance to discuss how generative AI will be integrated into Adobe's product ecosystem and how the company will operate moving forward.
Wadhwani sums up the main benefit of its new services: "Content is fueling the global economy. Digital content is really the way that enterprises need to engage their customers and drive and grow their business, and this is a single solution and application that they can do all of those five stages on."
Wadhwani also comments on the copyright environment for content borne by AI, and the marketing and use of this content through the newly announced Adobe GenStudio.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
JOSH LIPTON: This week at the company's annual conference in Las Vegas, Adobe emphasized that AI is very much part of its future. And that it plans to capitalize on this big technology shift. Here with more we are now joined by Adobe's David Wadhwani.
David, thank you for joining the show. I want to get right to David a data point that stood out here. Adobe now sees its total addressable market reaching 293 billion in 2027. That is up from a projected 205 billion in 2024.
So, you know, David, that's a nice sized jump. What explains that jump, and how much of that market do you think Adobe can ultimately capture?
DAVID WADHWANI: Yeah, thanks for having me, Josh. First of all, it is a significant growth in what we see in the market. And a lot of it is driven by the fact that generative AI is helping make creativity, and communication, and also marketing, and digital experiences much more approachable for everyone from communicators, all the way up to the largest enterprises in the world.
And given that we already do business across that spectrum, it's giving us an opportunity to reach those customers in a much more significant way than we've been able to reach in the past. So we feel that we are going to be one of the primary winners of that market. And we're very excited about the announcements we had at Summit yesterday.
JOSH LIPTON: Yeah, and so, David, let's dig right into some of those announcements. One, you unveiled Firefly services. Walk us through that product, David, and just what it's going to mean for Adobe customers.
DAVID WADHWANI: Great, yeah, for those viewers that don't know what Firefly is, Firefly is Adobe-owned generative model. So foundation models that let you create the widest set of AI creative content in the world. Everything from imaging, to design, to text, to vectors, and other capabilities coming like video, and audio, and 3D later this year.
What we did was we enabled all of the ability to reach all of that through APIs. So you can now, through an API an application programming interface, enable automation in enterprise workflows so that you can generate content, you can assemble content, and then you can distribute that content through an automation layer that helps enterprises move much more quickly and produce more content that they can use for personalizing their experiences with their customers.
JOSH LIPTON: And another product I want to touch on with you, David, because it made some headlines was Gen Studio. So this kind of sounded like end-to-end platform for delivering campaign content, David.
DAVID WADHWANI: That's exactly what it is. Every enterprise is struggling with content velocity. So they need to think about their content as a content supply chain.
How do you start by planning what you want to build? How do you actually go through the process of creating that content? How do you decide how to activate it and distribute it?
And what channels you want it to go out on? And then how do you measure it? And all of it sort of sitting on a platform of how do you manage just the proliferation of content you're creating.
Content is fueling the global economy. Digital content is really the way that enterprises need to engage their customers and drive and grow their business. And this is a single solution, an application that they can do all of those five stages on.
JOSH LIPTON: We talk about AI and these sort of AI innovations you all are announcing here. One question certainly for investors is, when are they going to see meaningful AI monetization, David. Any sense of timeline there? Is that late '24, 2025, how are you thinking about it?
DAVID WADHWANI: Yeah, we've been very clear with investors that we are hyper focused on really the proliferation of the use of this technology starting in October of last year when we took a lot of this technology generally available. And since then, we have seen an incredible adoption. First of all, one of the key things about the way we do AI is we build these products, these models responsibly. So everyone knows what we train on.
And then secondly, we integrate it into our tools, everything from Photoshop, to Adobe Express, all the way into our enterprise products that we've just talked about. We've now generated over 6.5 billion assets with all of this. So we feel really good about that proliferation.
And we are now starting to look at different ways to monetize it more actively. We've said we should expect to see some of the benefit of that in the back half of this year, and certainly, ramping going forward. But we're thrilled with the adoption. And that gives us all the levers we need to monetize this over time.
JOSH LIPTON: David, when you talk about AI, one issue that comes up and for good reason, it's copyright issues. What's interesting to note is Adobe actually provides legal protection for users, a legal shield. Explain that for us.
DAVID WADHWANI: Yeah, this is very important. And thank you for asking the question. I don't think it gets enough coverage. The problem with AI is also a question and a discussion we need to have around how is the AI trained, where are we getting the content, and how are we enabling that content to be trained.
Adobe is one of the only companies that trains our models on content that we have 100% access to and 100% license to. We're also very transparent about how we train that license. So, therefore, everything that people use for generative AI, if you're an organization, really we're one of the only choices in market.
The second thing we do is that everything that gets created with our artificial intelligence or any of our tools for that matter is inserted with content authenticity. Meaning it's like a digital nutrition label for how this content was created. So that not only do enterprises know where they got the content, but when the content does go out, consumers will know how the content was produced. And we think this is a really important thing, especially in an election year when over 50% end of the world is going out to vote.
JOSH LIPTON: You know, I want to bring this back to investors. When you talk about your TAM, David, that total addressable market, and you see it kind of growing mid-teens. But you also are just projecting about 10% growth.
There are some investors, David, who might hear that and think, Adobe is a real leader here. It should be growing faster than the overall market. What is your response to that?
DAVID WADHWANI: I come back to Adobe has always taken a long view on the market. And that's really what made us the company that we are today. We could, of course, take actions that are going to drive more revenue in the short-term. But we feel the right game to do right now is to drive proliferation, use really get everyone adopting our technology, and then ramp the value and the monetization over time.
For us, it is about making sure that Adobe, and Firefly, and Gen Studio are the places that companies and individuals come to create content more effectively. And then monetization will follow.
JOSH LIPTON: And, David, I want to get you out of here on a question about competition. It interests me when folks saw OpenAI Sora, David. I'm sure some Adobe investors, they might have gotten nervous.
I'm more interested in how you at Adobe saw that. And whether actually you saw that as a kind of opportunity, meaning it's one thing to generate an image. But if you want to cut, you want to edit it, et cetera, you still have to look for those Adobe tools. Is that how you saw it?
DAVID WADHWANI: Absolutely. Content production has always had multiple steps. It starts with capturing content, then it goes into producing that content, and it goes into distributing that content. Adobe has always played in the producing phase of this. And we think that's a massive market that we're going to continue to play in.
What Sora does is it really addresses the capture part. So, today, most of the content that's created, that gets edited in our tools is through cameras and video machines. Today with Sora, we're going to expect to see more video created that needs to flow into our tools. And we're going to integrate Sora and other video models directly into our tools.
I do want to also add that we have our own technology. The research is very similar to what Sora is doing. And we expect to have that out later this year.
So we feel very pleased with what Sora is doing. We'll have our own with, hopefully, increased levels of controllability. But it all flows into our tools and helps our business.
JOSH LIPTON: David, thank you so much for joining the show today. I appreciate your time.
DAVID WADHWANI: Thank you for having me, Josh.
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