Ed Ludlow

There's a lot of worries about whether Adobe, which has navigated the transition from package software to subscription software, whether they're going to be able to do the same in the AI era and survive all the newfound competitors they've got in the space.

That sets the scene, it sets the tone as well.

I did a big interview with Adobe's CEO in the summer, and there's clearly a frustration.

This is a stock that's down 22% this year, that they're not getting credit for the work they think they've done in AI.

Part of it is how they sell it.

Is there a bigger Adobe AI story that someone's buying?

You know, there might be.

They've tried to convince investors with a couple of metrics.

One is sort of AI-first revenue.

That's tracking at about $250 million.

They've got another one, AI-influenced revenue, about $5 billion.

But as the stock price-to-date shows, investors aren't buying that all the way, particularly in a world where OpenAI is getting a whole lot of interest with Sora.

Google's got new video generation models.

If you're a creative professional doing something, that's Adobe's wheelhouse, and there's a whole lot of AI in the monitors right now.

I'm grateful you mentioned that OpenAI in particular.

The debate that Adobe's had and maybe the shift is they tried to pitch themselves as we have our own models with our own safeguards and data and that's best for customers.

Now they seem to be saying we're open to using other models and other data inputs as well.

Have they kind of settled on their approach?

Yeah, it's a little bit of both.

As you said, they definitely built their own models.