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Adobe to update vague AI terms after users threaten to cancel subscriptions

Adobe to update vague AI terms after users threaten to cancel subscriptions

Adobe has promised to update its terms of service to make it “abundantly clear” that the company will “never” train generative AI on creators’ content after days of customer backlash, with some saying they would cancel Adobe subscriptions over its vague terms.

Users got upset last week when an Adobe pop-up informed them of updates to terms of use that seemed to give Adobe broad permissions to access user content, take ownership of that content, or train AI on that content. The pop-up forced users to agree to these terms to access Adobe apps, disrupting access to creatives’ projects unless they immediately accepted them.

For any users unwilling to accept, canceling annual plans could trigger fees amounting to 50 percent of their remaining subscription cost. Adobe justifies collecting these fees because a “yearly subscription comes with a significant discount.”

On X (formerly Twitter), YouTuber Sasha Yanshin wrote that he canceled his Adobe license “after many years as a customer,” arguing that “no creator in their right mind can accept” Adobe’s terms that seemed to seize a “worldwide royalty-free license to reproduce, display, distribute” or “do whatever they want with any content” produced using their software.

“This is beyond insane,” Yanshin wrote on X. “You pay a huge monthly subscription, and they want to own your content and your entire business as well. Going to have to learn some new tools.”

Adobe’s design leader Scott Belsky replied, telling Yanshin that Adobe had clarified the update in a blog post and noting that Adobe’s terms for licensing content are typical for every cloud content company. But he acknowledged that those terms were written about 11 years ago and that the language could be plainer, writing that “modern terms of service in the current climate of customer concerns should evolve to address modern day concerns directly.”

Yanshin has so far not been encouraged by any of Adobe’s attempts to clarify its terms, writing that he gives “precisely zero f*cks about Adobe’s clarifications or blog posts.”

“You forced people to sign new Terms,” Yanshin told Belsky on X. “Legally, they are the only thing that matters.”

Another user in the thread using an anonymous X account also pushed back, writing, “Point to where it says in the terms that you won’t use our content for LLM or AI training? And state unequivocally that you do not have the right to use our work beyond storing it. That would go a long way.”

“Stay tuned,” Belsky wrote on X. “Unfortunately, it takes a process to update a TOS,” but “we are working on incorporating these clarifications.”

Belsky co-authored the blog this week announcing that Adobe’s terms would be updated by June 18 after a week of fielding feedback from users.

“We’ve never trained generative AI on customer content, taken ownership of a customer’s work, or allowed access to customer content beyond legal requirements,” Adobe’s blog said. “Nor were we considering any of those practices as part of the recent Terms of Use update. That said, we agree that evolving our Terms of Use to reflect our commitments to our community is the right thing to do.”

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Canva’s Affinity acquisition is a non-subscription-based weapon against Adobe

M&A —

But what will result from the companies’ opposing views on generative AI?

Affinity's photo editor.

Enlarge / Affinity’s photo editor.

Online graphic design platform provider Canva announced its acquisition of Affinity on Tuesday. The purchase adds tools for creative professionals to the Australian startup’s repertoire, presenting competition for today’s digital design stronghold, Adobe.

The companies didn’t provide specifics about the deal, but Cliff Obrecht, Canva’s co-founder and COO, told Bloomberg that it consists of cash and stock and is worth “several hundred million pounds.”

Canva, which debuted in 2013, has made numerous acquisitions to date, including Flourish, Kaleido, and Pixabay, but its purchase of Affinity is its biggest yet—by both price and headcount (90). Affinity CEO Ashley Hewson said via a YouTube video that Canva approached Affinity about a potential deal two months ago.

Before its Affinity purchase, Canva claimed 175 million users, which interestingly includes 90 million accrued since September 2022, when Canva launched Visual Suite. Without Affinity, though, Canva hasn’t had a way to appeal to the business-to-business market.

Affinity, which works with iPads, Macs, and Windows PCs, meanwhile, has a creative suite that includes a photo editor, professional page layout software, and Designer, a vector-based graphics software that “thousands” of illustrators, designers, and game developers use, Obrecht said when announcing the acquisition.

Of course, Affinity’s user base isn’t nearly the size of Adobe’s. Affinity claims that 3 million creative professionals use its tools. Adobe hasn’t provided hard numbers recently, but in 2017, it was estimated that Adobe Creative Cloud had 12 million subscribers, and Adobe currently claims to have 50 million members on its Behance online community.

However, Affinity has earned a following among creative professionals seeking an alternative to Adobe. Speaking to Bloomberg, Obrecht was keen to point out that Apple has featured Affinity apps in presentations about creative products, for example.

Perpetual Affinity licenses will still be available

Since being founded in 2014, one of the biggest ways that Affinity has stood out to creatives looking to avoid the costs associated with Adobe, including subscription fees, is perpetual licensing. New owner Canva pledged in an announcement today that one-time purchase fees will always be an option for Affinity users.

“Perpetual licenses will always be offered, and we will always price Affinity fairly and affordably,” an announcement today from Canva and Affinity said.

If Canva ever decides to sell Affinity as a subscription, perpetual licensing will remain available, Canva said, adding: “This fits with enabling Canva users to start adopting Affinity. It could also allow us to offer Affinity users a way to scale their workflows using Canva as a platform to share and collaborate on their Affinity assets, if they choose to.”

As we’ve seen with many other acquisitions, though, it’s common for companies to start changing their minds about how they’re willing to operate an acquired business years or even months after finalizing the purchase. And, of course, Canva’s idea of pricing “fairly and affordably” could differ from those of long-time Affinity users.

What about AI?

Canva also vowed to keep Affinity available as a standalone product and said there will be upcoming free updates to Affinity V2. However, Cameron Adams, Canva’s co-founder, pointed to potential future integration between Canva’s and Affinity’s offerings when speaking with Sydney Morning Herald:

Our product teams have already started chatting and we have some immediate plans for lightweight integration, but we think the products themselves will always be separate. Professional designers have really specific needs.

Canva’s announcement today said that the company plans to accelerate the rollout of “highly requested” Affinity features, “such as variable font support, blend and width tools, auto object selection, multi-page spreads, [and] ePub export.” With Canva, which was valued at $26 billion in 2021 and generates over $2.1 billion in annualized revenue, taking ownership of Affinity, the creative suite is expected to have more resources for improvements and updates than before.

Notably, though, Canva hasn’t revealed to what degree it may try to incorporate AI into Affinity. Canva is fully aboard the generative AI hype train and, as recently as this Monday pushed workers of all types to embrace the technology. Affinity, meanwhile, has said that it won’t make any generative AI tech and is “against anything which undermines human talent or tramples on artists’ IP.” Affinity’s stance could be forced to change one day under its new owner.

To start, though, Canva’s acquisition helps to fill the B2B gap in its portfolio, and it’s expected to use its new appeal to go after some of Adobe’s dominance.

“While our last decade at Canva has focused heavily on the 99 percent of knowledge workers without design training, truly empowering the world to design includes empowering professional designers, too. By joining forces with Affinity, we’re excited to unlock the full spectrum of designers at every level and stage of the design journey,” Obrecht said in Tuesday’s announcement.

Meanwhile, Adobe abandoned its own recent merger and acquisition efforts, a $20 billion purchase of Figma, in December due to regulatory concerns.

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Adobe gives up on $20 billion acquisition of Figma

No deal —

Competition probes in the EU and UK made regulatory approval dicey.

Adobe and Figma logos

Adobe has abandoned its proposed $20 billion acquisition of product design software company Figma, as there was “no clear path to receive necessary regulatory approvals” from UK and EU watchdogs.

The deal had faced probes from both the UK and EU competition regulators for fears it would have an impact on the product design, image editing, and illustration markets.

Adobe refused to offer remedies to satisfy the UK Competition and Markets Authority’s concerns last week, according to a document published by the regulator on Monday, arguing that a divestment would be “wholly disproportionate.”

Hours later, the two companies issued a mutual statement terminating the merger, citing the regulatory challenges. Adobe will pay Figma $1 billion in a termination fee under the terms of the merger agreement.

“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and chief executive of Adobe.

The companies had been battling multiple regulatory challenges, with the EU’s executive body, the European Commission, publishing a statement of objections to the deal last month arguing the takeover could “significantly reduce competition in the global markets.”

Margrethe Vestager, the EU’s competition commissioner, said: “By combining these two companies, the proposed acquisition would have terminated all current and prevented all future competition between them. Our in-depth investigation showed that this would lead to higher prices, reduced quality or less choice for customers.”

Competition regulators around the world have sent mixed signals over the aspirations of Big Tech groups hoping to acquire promising start-ups and potential rivals, at a time when public markets have been largely closed to new listings.

The EU’s antitrust watchdog has made a formal objection to Amazon’s $1.7 billion proposed purchase of Roomba-maker iRobot. However, Microsoft was able to complete its $75 billion takeover of games maker Activision after it made revisions to the deal to appease UK regulators.

Speaking with the Financial Times last week, Figma chief executive Dylan Field said: “It is important that those paths of acquisition remain available because very few companies make it all the way to IPO. So many companies fail on the way.”

Shares in Adobe were up almost 2 percent in pre-market trading. Since the deal was announced, Adobe has turned its focus to embedding generative artificial intelligence into its products by, for example, enabling users to create novel stock imagery with AI.

The huge price that Adobe was willing to pay for San Francisco-based Figma had been seen by critics of the deal as an effort to quash the software giant’s most promising new rival in decades.

The deal, which was first negotiated during the COVID-19 pandemic’s boom in tech investment and announced in September 2022, would have valued Figma at roughly 50 times its annual recurring revenue, and double its last private funding round in 2021.

The companies were expected to appear in front of the CMA to contest the regulator’s provisional findings on Thursday this week.

Under its proposed remedies in November, the CMA said it was considering either prohibiting the deal or demanding the divestiture of overlapping operations, such as Adobe’s Illustrator or Photoshop, or Figma’s core product, Figma Design.

Field said that the latter suggestion left him amazed at “the idea of buying a company so you can divest the company.”

“When I read that document and saw that was one of the proposals, I thought it was quite amusing; it felt like a bit of a punchline to a joke. I was surprised to see that as a proposal from the agency.” In a statement on Monday, Field said he was “disappointed in the outcome.”

Earlier on Monday, the CMA had published the companies’ responses to its provisional findings, which Adobe and Figma said contained “serious errors of law and fact” and took “an irrational approach to the gathering and appraisal of evidence.”

“Requiring a multibillion-dollar global divestment of Photoshop or Illustrator in order to address an uncertain and speculative theory of harm is wholly disproportionate,” they wrote.

© 2023 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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Adobe’s VR 3D Modeling Tool Now Available on New Headsets, Quest Support Planned

Adobe’s VR modeling tool, Substance 3D Modeler, is now available on Steam, bringing with it support for Valve’s Index headset and possibly others.

Adobe released 3D Modeler as part of its ‘Substance’ suite of applications last year. The application supports VR and non-VR modes. In VR, users can intuitively ‘sculpt’ 3D models to their liking, then pull them into the 2D mode for refinements and use with the rest of the Substance suite (or vice versa).

When the app first launched it only supported Meta VR headsets through the Oculus PC software. Now Substance 3D Modeler has launched on Steam, bringing official support for Valve Index and its controllers for the first time.

Ostensibly the app should work just fine through Steam on Meta headsets as well, and other SteamVR headsets may work with the app too, assuming users can create the correct bindings for their controllers (though Adobe is not claiming official support for any other headsets at this time). Sources tell us that official support for Vive wands could be coming in the future.

Unlike Substance 3D Modeler bought through Adobe’s Creative Cloud platform (which is only offered as a subscription) the Steam version is a one-time purchase with updates promised through the end of 2023. Though priced regularly at $150, the Adobe is offering a limited time ‘introductory offer’ of $100 (30% discount) on Steam for the next two days.

As announced previously Adobe still expects to bring Substance 3D Modeler to Quest as a standalone application next year.

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