Adobe Has a New CEO. Here’s the AI Crisis He Inherits.

Adobe announced on September 3 that Anil Chakravarthy will become its next president and CEO on December 1, 2026. He succeeds Shantanu Narayen, who led the company for 18 years and built it from a desktop software maker into one of the most important enterprise software platforms on earth.

Narayen’s legacy is remarkable. Adobe’s market capitalisation grew from roughly $4 billion when he took over in 2007 to a peak of over $300 billion in 2021. He oversaw the shift from boxed software to subscription, the acquisition of Marketo for $4.75 billion, and the transformation of Adobe Experience Cloud into a serious enterprise platform.

But when Narayen announced his departure in March 2026, Adobe’s stock had already fallen roughly 45% from its peak. And the reason tells you everything about the challenge his successor inherits: artificial intelligence.

Who Is Anil Chakravarthy

Chakravarthy is not an outsider brought in to shake things up. He joined Adobe in January 2020 after four years as CEO of enterprise data management company Informatica, where he previously worked alongside Narayen through a partnership between the two companies. He has spent the past six and a half years running Adobe’s Customer Experience Orchestration business and its worldwide field operations — the segment that sells to large enterprises and generates a significant share of the company’s revenue.

His track record within Adobe is strong. He led the development of Adobe CX Enterprise, GenStudio, and Brand Visibility, and oversaw major acquisitions including Workfront and Semrush. The board ran a rigorous selection process before unanimously selecting him — and the outcome is a bet on continuity and expertise over disruption.

That choice was deliberate. As one analyst put it, the selection of Chakravarthy “suggested the board favored continuity over a dramatic strategic shift” — a characterisation that some investors found underwhelming but that others read as the right call for a company that needs execution rather than another pivot.

The AI Disruption Adobe Is Fighting

Understanding what Chakravarthy is walking into requires understanding what happened to Adobe’s stock — and the broader creative software industry — over the past three years.

Adobe builds tools for designers, marketers, filmmakers, and creative professionals. Photoshop, Illustrator, Premiere Pro, Acrobat, Experience Cloud. These are powerful, deeply embedded products with decades of user investment and no obvious replacements. For a long time, Adobe’s position felt almost unassailable.

Then generative AI arrived, and the assumptions behind that position started to unravel.

The AI image generation tools, Midjourney, DALL-E, Stable Diffusion, Adobe’s own Firefly, made it possible to create professional-quality visuals in seconds from a text prompt. AI video tools can now generate, edit, and grade footage with a fraction of the manual effort Premiere Pro traditionally required. AI writing tools handle first drafts that used to take hours. For many routine creative tasks, the barrier to entry collapsed almost overnight.

This created two simultaneous threats for Adobe. The first is direct competition from AI-native tools — Canva, Figma, and a new generation of AI-powered design platforms that are faster and easier to learn than Photoshop. The second, and more insidious, is demand destruction: if AI can generate a marketing image or a product photo in seconds, some of the work that professional designers previously did simply doesn’t need to be commissioned at all.

Adobe has not been passive in response. Firefly — its own generative AI platform — has processed more than 20 billion generations. It has embedded AI features across Photoshop, Illustrator, Premiere, and Experience Cloud. It built GenStudio specifically for AI-powered content creation at enterprise scale. The tools are genuinely good. The question is whether they’re good enough to retain customers who are increasingly tempted by faster, cheaper alternatives.

The Figma Complication

Adobe’s AI challenge is compounded by a strategic setback it couldn’t avoid. In September 2022, Adobe agreed to acquire Figma — the collaborative design tool beloved by product designers and the clearest competitive threat to Adobe XD — for $20 billion. The deal was blocked by UK and EU regulators in December 2023. Adobe paid Figma a $1 billion termination fee and walked away.

That $1 billion didn’t just sting financially. It left Figma independent, well-funded, and more motivated than ever to expand at Adobe’s expense. Since the blocked deal, Figma has moved aggressively into AI features and launched Figma AI — a suite that generates UI designs from text prompts, makes smart layout suggestions, and automates repetitive design tasks. It now competes directly with Photoshop and Illustrator workflows that Adobe assumed it was protecting.

Chakravarthy’s team needs to answer a question Narayen never fully resolved: what is Adobe’s core defensible advantage in a world where design tools are increasingly AI-native and the moat of professional expertise Adobe relied on is eroding?

What the Strategy Looks Like Going In

The early signals from Chakravarthy’s appointment suggest three strategic priorities. First, AI embedded across all products — not as a separate feature but as a core capability that makes every Adobe tool faster and more capable. Firefly is the foundation; the goal is to make it the industry standard for commercially safe AI-generated content, with full intellectual property indemnification that competing tools can’t match.

Second, enterprise deepening. Chakravarthy built his career at Adobe selling to large enterprises. Adobe Experience Cloud — the platform that manages digital marketing, analytics, and content supply chains for Fortune 500 companies — is where margins are highest and switching costs are deepest. He knows that business better than almost anyone.

Third, agentic software. Adobe says it aims to build leadership in “agentic software for creativity, productivity and customer experience” — AI agents that operate autonomously within Adobe’s ecosystem, handling repetitive creative tasks, personalisation at scale, and content distribution without constant human direction. This is the frontier where the next competitive battle will be fought.

What Success Looks Like for Chakravarthy

The board’s measure of success is almost certainly one thing: stabilise and grow the stock. Adobe’s shares have lost roughly 45% from peak, underperforming the broader software sector even as enterprise AI spending has surged. Investors are pricing in continued disruption. Chakravarthy needs to demonstrate that Adobe can grow into the AI era rather than being eroded by it.

He has three months before he officially takes over. That time will likely be spent in customer meetings, product reviews, and competitor analysis. December 1 is when the clock starts — and the market will be watching from day one. For more on the AI disruption reshaping creative and enterprise software, see our guide on how to choose the right AI tool for your needs and our breakdown of 10 emerging technologies transforming the future.

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