Adobe faces test of staying relevant as AI reshapes creative work
Adobe's record revenue masks a deeper problem: investors and creatives are both questioning whether the company can adapt fast enough to survive the AI era without losing what made it essential.
The pressure is real. Despite $6.40 billion in first-quarter fiscal 2026 revenue, Adobe's stock has fallen as investors worry that AI agents and new tools could erode demand for its traditional software model. At the same time, creative professionals are wary that the company is abandoning craft in pursuit of scale.
Anil Chakravarthy, who leads Adobe's customer experience business, is navigating that tension. The former Informatica CEO describes the core challenge plainly: the company must move fast enough to stay competitive without breaking the reliability that enterprise customers depend on.
Speed versus stability
Chakravarthy frames the gap this way: "The fastest moving AI models and the AI companies, let's say they're moving at 100 miles an hour. The customers are moving at 10 miles an hour."
That mismatch leaves Adobe caught. Move too slowly and the company looks outdated. Move too quickly and you break the software customers pay for. Inside a company of more than 30,000 people, that split creates what Chakravarthy calls "whiplash."
The stakes are higher now. Longtime CEO Shantanu Narayen announced last month he will step down once a successor is found. The transition has forced internal questions about whether Adobe's future depends on preserving its creative roots or on building the enterprise discipline needed to survive AI disruption.
The generation-versus-execution divide
Chakravarthy sees this as a fundamental platform shift, comparable to the move from mainframes to client-server computing to the internet to mobile. But this transition poses a sharper threat to incumbents than those earlier changes.
AI has already lowered the barrier to producing content. Users can generate images, videos, copy, and campaigns with growing ease using multiple tools. As that becomes commonplace, the question shifts: why pay for expensive, sophisticated software at all?
Chakravarthy's answer hinges on a distinction between generation and execution. Producing a draft is becoming easier. Turning that draft into something a company can actually use, trust, govern, and recognize as its own is harder. That is where Adobe is betting its future.
"The more ubiquitous base capabilities become, the harder it actually becomes to differentiate and stand out," Chakravarthy said. "And that's where we believe we will continue to have a very vital role to play."
What creatives actually worry about
The company's logic may work in the boardroom. It is less reassuring to Adobe's core users. Creative professionals have been direct about Firefly, Adobe's generative AI system for creating and editing images. Some question how the models were trained, whether copyrighted work was used, and whether tools like this will reduce the value of human creative labor.
Adobe wants to present its new tools as accelerants for creativity rather than replacements for it. It wants to promise greater speed without implying that skill matters less. It wants to reach a broader user base without signaling to core professionals that AI will devalue their work. Those are difficult positions to hold at once.
Chakravarthy's bet is that originality, identity, and taste matter more when everyone can make content quickly and cheaply. In that world, Adobe does not need to be the only company that can generate content. It needs to help customers turn generated material into work that feels unmistakably their own.
Whether that strategy convinces either creatives or investors remains an open question. For now, Adobe is caught between two speeds, trying to satisfy both.
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