<\/p>\n
Las Vegas: On Tuesday, Shantanu Narayen, the chief executive of California-based tech firm Adobe, led the company\u2019s two-hour-long pitch to convince businesses and analysts that in the race among Big Tech firms to sell their innovations in artificial intelligence (AI), it warrants a seat at the top. While a new full-stack agentic AI platform would see Adobe rival the likes of Salesforce, its key executives are clear about one thing: selling AI to businesses still won\u2019t be an easy task.<\/p>\n
In the long run, Adobe wants to become the one-stop software seller to businesses for all purposes\u2014including letting them access third-party foundational AI models such as Google\u2019s Gemini for reasoning tasks, and Runway\u2019s Gen-3 and beyond for generative videography tasks.<\/p>\n
Wall Street, however, did not react kindly to Adobe\u2019s announcements. On Tuesday, after opening at $395.96 per share on the Nasdaq exchange, Adobe\u2019s shares fell 2.6% after the announcements at one point, but recovered mildly to close at $391.37 per share.<\/p>\n
Adobe is not the only tech firm facing scepticism on AI offerings. On 26 February, Amazon unveiled Alexa \u2018Plus\u2019\u2014a generative AI experience with the company\u2019s Echo range of smart speakers\u2014that the tech firm is looking to monetize by making it available only to subscribers. The catch: if users buy a new Echo device with Alexa Plus enabled, there will be no option to opt-out of sending various samples of recorded voice inputs to Amazon, all for \u2018improving\u2019 its AI offerings.<\/p>\n
Much like Adobe, Amazon\u2019s AI pitch was largely ignored by investors. Since its AI unveiling last month, Amazon\u2019s share price on Nasdaq has declined by more than 10% to $192.82 as of Tuesday\u2019s closing bell.<\/p>\n
The scepticism may be coming largely from the uncertain returns on investment from AI. For instance, Adobe\u2019s numbers don\u2019t quite show a lot of excitement about the uptake of its deepest enterprise play so far.<\/p>\n
\u201cWe\u2019ve already generated $125 million in our first quarter of this fiscal from pure-play AI subscriptions and sales and, by the end of this fiscal, we expect the AI revenue to double to $250 million,” Eliot \u2018Ely\u2019 Greenfield, global chief technical officer of Adobe\u2019s digital media business, told Mint.<\/p>\n
The numbers pale when taken in the larger context: in its first quarter of reporting between December 2024 and February 2025, Adobe reported net revenue of $5.71 billion. AI, thus, accounted for a meagre 2.2% of its overall revenue.<\/p>\n
Analysts Mint spoke with said Adobe\u2019s predicament is a blueprint for all Big Tech firms\u2014while generative AI is transformative, its business impact is yet to translate into reality.<\/p>\n
The tech leaders, in fact, are accepting that there’s a challenge. \u201cInnovating to build AI without using third-party, open-source datasets is like building with our handcuffs on,” Greenfield said. \u201cIt definitely does restrict the extent to which the performance of our AI models could have improved so far, as well as the diversity and quality of results that it could have produced today.”<\/p>\n
He added that Adobe is still doing it today to ensure that more businesses realize there are \u201ctangible returns in terms of saved manpower hours, more window for creativity and better targeted marketing by using our AI agents”.<\/p>\n
In the long run, Greenfield expects customer billing from Adobe\u2019s generative AI offering to pick up pace. \u201cIt\u2019s not going to be instantaneous, but to make sure that it is a smooth upward climb, we\u2019re bundling together support for third-party AI models as well to give customers as much of a choice as we can\u2014all the while offering legal indemnification from AI lawsuits when Adobe\u2019s own models are used,” he said.<\/p>\n
The slow pace of growth, analysts said, is a clear sign that without infringements and pitfalls, Big Tech may struggle to sell its AI innovation to clients. \u201cAdobe has gone the safe way and played it conservatively in its generative AI push\u2014and its strategy is yet to be proven. It has so far failed to offer an exciting AI revenue roadmap to Wall Street\u2014Tuesday\u2019s event is all about trying to change that perception,” said Kashyap Kompella, AI analyst and founder of tech consultancy, RPA2AI.<\/p>\n
To be sure, both OpenAI and Google are embroiled in copyright infringement lawsuits, where parties including The New York Times Company Limited are pushing charges, claiming that the tech firms used copyrighted material to train commercial AI models. The two tech majors\u2014one the face of generative AI and other the founding sponsor\u2014are lobbying the US government to qualify the use of any public information to train AI models as \u201cfair usage”. The US government, on 25 February, opened filings for public comments\u2014and much of AI\u2019s commercial success hinges upon this verdict.<\/p>\n
\u201cThe uptake of AI is definitely there in marketing initiatives, but for the most part, many marketers are conservative about the uptake of generative AI purely from the copyright infringement perspective,” Billy Seabrook, global chief design officer at tech integrator IBM Consulting, told Mint. \u201cWhile Adobe\u2019s Firefly model does help in generating copyright-free video and creative illustration content, its effectiveness in performance is likely restricted to being background fillers. Others such as Midjourney and Google\u2019s Imagen are superior, but cannot be taken up by commercial content creators.”<\/p>\n
Others, too, are convinced that for now, Big Tech\u2019s biggest challenge is their own pitfall\u2014that of failing to convince businesses in selling AI without lawsuits.<\/p>\n
\u201cEventually, all tech firms will start pushing harder. Each company has spent billions of dollars in AI research and development, so none will let go of generative AI so easily. But, the challenges will remain at least until there is regulatory clarity, or the models become good enough with self-contained re-training upon a finite dataset,” said Jayanth Kolla, co-founder and partner of AI and technology consulting firm, Convergence Catalyst.<\/p>\n
\u201cThe idea is simple\u2014eventually, all layers of enterprise automation will be bundled into tech platforms that will sell generative AI integrators to vendors. But, until policies are tightened and lawsuits get a specific direction and precedent at least in some leading geography, AI sales will be slow\u2014and Big Tech\u2019s returns on their generative AI bets will keep getting pushed into the future. It\u2019s happening right now\u2014and it is affecting not just Big Tech, but India\u2019s largest tech outsourcing firms as their AI revenue should have already become a sizeable segment to report,” Kolla added.<\/p>\n
The writer is in Las Vegas, US, on Adobe\u2019s invitation.<\/i><\/p>\n
\u00a0<\/p>\n
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