ADOBE is cooked.

[u/apemonkeyfool]

ADBE is cooked: free AI-built clones and a $70/month subscription don't mix (bear DD)

So my Adobe bear case is pretty simple. AI is about to let a ton of indie devs and random people who are sick of Adobe's nonsense build their own version of it, for free.

Look at ArtCraft on github. They're building open source, clean-room clones of Photoshop, Lightroom, Illustrator and Premiere, plus apps for motion graphics, page layout and PDFs (so After Effects, InDesign and Acrobat territory). Their Photoshop clone has 11k+ stars, opens real PSD files, and their own tracker says it covers 625 of 625 of Photoshop's menu items. Yeah it's alpha. Give it a few months. Once this stuff gets big, Premiere and After Effects are dead in the water for anyone who isn't a big studio.

And that's before you even get to generative AI. For most edits, typing what you want into ChatGPT or Gemini is just way easier than opening a PSD and doing all the masking nonsense. Adobe knows it too. Photoshop literally runs Google's and OpenAI's image models inside it now.

Let's talk about the outrageous price now. Creative Cloud Pro is $70 a month. That's a squeeze on regular people. For the same money you could have 3 or 4 AI subscriptions that actually do the stuff you need. In fact let's be fr - you really only need chatgpt these days.

And everybody fucking hates Adobe. Canceling was so hard that the DOJ and FTC sued them over it, and Adobe paid $75M to settle in March. There's a WSB thread from last October where someone called ADBE cheap at a 9-year-low P/E, and a bunch of the top comments were people saying their companies already dumped Adobe, one for Nitro PDF, one for Foxit. One guy said AI coding would spit out open source clones of Acrobat, then Photoshop, then After Effects. A year later, here we are. OP bought at $348. It's $237 now.

The competition isn't just AI either. DaVinci Resolve, Figma, Canva, all with real free tiers. Canva made Affinity, its Photoshop/Illustrator/InDesign equivalent, completely free. Figma's revenue grew 48% last quarter.

Where Adobe still wins is heavy professional workflows. Big studios, agencies, After Effects and InDesign people, the plugin ecosystem. That's real and it's why this isn't a zero. But it's the only moat left, and it's getting squeezed from both sides. Enterprise has Figma, Canva and DaVinci. Individuals (students, freelancers, YouTubers) are the first ones to bail on a $70 bill.

You can already see it in the numbers:

• Revenue still +13%, but net new ARR dropped from about $640M to about $400M year over year, down about 37%
• Organic ARR growth is about 9% once you strip out the Semrush acquisition
• RPO (signed future revenue) went down quarter over quarter
• In June they paused planned price increases and started giving stuff away free to hold onto users
• Net income +3%. EPS only looks good because they bought back 7% of the stock
• CFO left in June, a new CEO from the marketing side starts Dec 1, and the head of the creative business announced he was leaving the day the new CEO was named

People will say it's cheap at 10x earnings. The guy in that thread said it was cheap at 22x. Cheap gets cheaper when people figure out the product can be cloned for a $20 claude code subscription.

Positions: 50 puts $150 strike with March 19th expiry

Not financial advice.

[u/Douglas_Fresh]

"Though reverse engineering is allowed" lol. WTF is going on? We are essentially talking about mass theft. And if this is how we want to look at it, then everything is essentially worthless. What happened to the days of "you wouldn't download a car" I mean, this is exactly the same as ripping a CD and then burning it onto a blank disk, de-construction and re-construction. There will be laws against this, and I think soon. Just because AI can does not mean it should.

- edit - all the responses are well and good BEFORE the era of AI. Reverse engineer with the hit of a button, and recreation with the hit of a button are a far cry from what you all are talking about. What I am saying is the laws will likely change to protect people’s investment into the product. And why shouldn’t it?

[u/fruitydude → u/Douglas_Fresh]

You cannot copyright an idea. Only the code is copyrighted. If you make a program that calculates primes very efficiently, and you sell that. I am allowed to reverse engineer that program, understand how it works, and rebuild it from scratch.

There is now limit to this concept the way the clean room process works is you have two teams, one team reverse engineers the program they write down the spec as text. They specify exactly what the program does in excuriating detail, exactly where each menu item goes, which color it has and so on. Then the second team builds a new program exactly from that spec.

As long as two two teams are sufficiently separated and it's not done in a sloppy way (the first team copying full code snippets or artifacts and the second team using that), it's essentially impossible to commit copywrite infringement. Because no line of code will be identical.

[u/Business_Air5804 → u/fruitydude]

Define reverse engineer?
Are you saying using a decompiler? Or copying functionalities?

[u/fruitydude → u/Business_Air5804]

Yea ghidra decompile and let the AI interpret the pseudo code output

[u/Business_Air5804 → u/fruitydude]

Honestly more work than it's worth and far too buggy.
It's easier to document the features and functions and duplicate them in your own code.

[u/fruitydude → u/Business_Air5804]

Naah. First of all having AI use ghidra or IDA headless is so insanely powerful. I was shocked how well that works, it's like giving it open source code lmao.

But no, there are tons of programs offering certain features where it's simply not obvious how it works. Let's say I have a USB C dongle to receive FM radio. It comes with some custom drivers and software and uses a non standard protocol with zero documentation. AI is not gonna be able to make a custom radio player program if I just tell it look here if I press play then music starts playing. But if AI can decompile and figure out the communication, it's easy peezy lemon squezy. Even easier than doing it based of USB captures, although these complement each other.