Today, I’m talking with Adobe CEO Shantanu Narayen. Shantanu’s been at the top of my list of people I’ve wanted to talk to for the show since we first launched — he’s led Adobe for nearly 17 years now, but he doesn’t do too many wide-ranging interviews. I’ve always thought Adobe was an underappreciated company — its tools sit at the center of nearly every major creative workflow you can think of — and with generative AI poised to change the very nature of creative software, it seemed particularly important to talk with Shantanu now.

Adobe has an enormously long and influential history when it comes to creative software. It began in the early 1980s, developing something called PostScript that became the first industry-standard language for connecting computers to printers — a huge deal at the time. Then, in the 1980s and 1990s, it released the first versions of software that’s now so ubiquitous that it’s hard to imagine the computing and design industries without them. Adobe created the PDF, the document standard everyone now kind of loves to hate, as well as programs like Illustrator, Premiere, and — of course — Photoshop. If you work in a creative field, it’s a near certainty that there’s Adobe software running somewhere close to you.

All that influence puts Adobe right at the center of the whole web of tensions we like to talk about on Decoder — especially as the company has evolved its business and business model over time. Shantanu joined the company in 1998, back when desktop software was a thing you sold on a shelf. He was with the company when it started bundling a whole bunch of its flagship products into the Creative Suite, and he was the CEO who led the company’s pivot to subscription software with Creative Cloud in 2012. He also led some big acquisitions that turned into Adobe’s large but under-the-radar marketing business — so much of what gets made in tools like Photoshop is marketing and advertising collateral, after all, and the company is a growing business in helping businesses create, distribute, and track the performance of all that work around the web.

But AI really changes what it means to make and distribute creative work — even what it means to track advertising performance across the web — and you’ll hear us talk a lot about all the different things generative AI means for a company like Adobe. There are strategic problems, like cost: everyone’s pouring tons of money into R&D for AI, but not many people are seeing revenue returns on it just yet, and Shantanu explained how he’s betting on that investment return.

Then there are the fundamental philosophical challenges of adding AI to photo and video tools. How do you sustain human creativity when so much of it can be outsourced to the tools themselves with AI? And I asked a question I’ve been thinking about for a long time as more and more of the internet gets so deeply commercialized: What does it mean when a company like Adobe, which makes the tools so many people use to make their art, sees the creative process as a step in a marketing chain, instead of a goal in and of itself?

This one got deep — like I said, Shantanu doesn’t do many interviews like this, so I took my shots.

Okay: Adobe CEO Shantanu Narayen. Here we go.

This transcript has been lightly edited for length and clarity.

Shantanu Narayen, you’re the CEO of Adobe. Welcome to Decoder!

Thanks for having me, Nilay.

I am very excited to talk to you. You are one of the first guests I ever put on a list of guests I wanted on the show because I think Adobe is under-covered. As the CEO, you’ve been there for a long time. You don’t give a lot of interviews, so I’m very excited you chose to join us on the show.

Adobe is 40-plus years old. It has been a lot of different kinds of companies. You have been there since 1998. You became CEO in 2007. You saw at least one paradigm shift in computing. You led the company through another shift in computing. How would you describe Adobe today?

I think Adobe has always been about fundamental innovation, and I think we are guided by our mission to change the world through digital experiences. I think what motivates us is: Are we leveraging technology to deliver great value to customers and staying true to this mission of digital experiences?

What do you mean, specifically, by digital experiences?

The way people create digital experiences, the way they consume digital experiences, the new media types that are emerging, the devices on which people are engaging with digital, and the data associated with it as well. I think we started off way more with the creative process, and now we’re also into the science and data aspects. Think about the content lifecycle — how people create content, manage it, measure it, mobilize it, and monetize it. We want to play a role across that entire content life cycle.

I love this; you’re already way into what I wanted to talk about. Most people think of Adobe as the Photoshop company or, increasingly, the Premiere company. Wherever you are in the digital economy, Adobe is there, but what most people see is Creative Cloud.

You’re talking about everything that happens after you make the asset. You make the picture in Photoshop, and then a whole bunch of stuff might happen to it. You make the video in Premiere, and then a lot of things might happen. If you’re a marketer, you might make a sale. If you’re a content creator, you might run an ad. Something will happen there. You’re describing that whole expansive set of things that happen after the asset is made. Is that where your focus is, or is it still at the first step, which is someone has to double-click on Photoshop and do a thing?

I think it is across the entire chain — and, Nilay, I’d be remiss if I didn’t also say we are also pretty well known for PDF and everything associated with PDF!

[Laughs] Don’t worry, I have a lot of PDF questions coming for you.

I think as it relates to the content, which was your question: it doesn’t matter which platform you’re using to create content, whether it’s a desktop, whether it’s a mobile device, whether it’s web — that’s just the first step. It’s how people consume it, whether it’s on a social media site or whether it’s a company that’s engaging with customers and they’re creating some sort of a personalized experience. So, you’re right — very much, we’ve changed our aspirations. I think 20 years ago, we were probably known just for desktop applications, and now we’ve expanded that to the web, and the entire chain has certainly been one of the areas in which we’ve both innovated and grown.

I want to come back to that because there are a lot of ideas embedded in that. One thing that’s on my mind as I’ve been talking to people in this industry and all the CEOs on Decoder: half of them tell me that AI is a paradigm shift on the order of mobile, on the order of desktop publishing, all things that you have lived through. Do you buy that AI is another one of these paradigm shifts?

I think AI is something that we’ve actually been working on for a long time. What do computers do really well? Computers are great at pattern matching. Computers are great at automating inefficient tasks. I think all the buzz is around generative AI, which is the starting point of whether you’re having a conversational interface with your computer or you’re trying to create something and it enables you to start that entire process. I do think it’s going to be fairly fundamental because of the amount of energy, the amount of capital, the amount of great talent that’s focused on, “What does it mean to allow computers to have a conversation and reason and think?” That’s unprecedented. Even more so than, I would say, what happened in the move to mobile or the move to cloud because those were happening at the same time, and perhaps the energy and investment were divided among both, whereas now it’s all about generative AI and the implications.

If you are Microsoft or Google or someone else, one of the reasons this paradigm shift excites you is because it lets you get past some gatekeepers in mobile, it lets you create some new business models, it lets you invent some new products maybe that shift some usage in another way. I look at that for them and I say: Okay, I understand it. I don’t quite see that paradigm shift for Adobe. Do you see that we’re going to have to invent a new business model for Adobe the way that some of the other companies see it?

I think any technology shift has the same profound impact in terms of being a tailwind. If you think about what Microsoft does with productivity, and if you think about what Adobe does with creativity, one can argue that creativity is actually going to be more relevant to every skill moving forward. So I do think it has the same amount of profound implication for Adobe. And we’ve innovated in a dramatic way. We like to break up what we are doing with AI in terms of what we do at the interface layer, which is what people use to accomplish something; what we’re doing with foundation models; and what models are we creating for ourselves that are the underlying brain of the things that we are attempting to do, and what’s the data? I think Adobe has innovated across all three. And in our different clouds — we can touch on this later — Creative Cloud, Document Cloud, and Experience Cloud, we’re actually monetizing in different ways, too. So I am really proud of both the innovation on the product side and the experimentation on the business model side.

The reason I asked that question that way, and right at the top, is generative AI. So much of the excitement around it is letting people who maybe don’t have an affinity for creative tools or an artistic ability make art. It further democratizes the ability to generate culture, however you wish to define culture. For one set of companies, that’s not their business, and you can see that expands their market in some way. The tools can do more things. Their users have more capabilities. The features get added.

For Adobe, that first step has always been serving the creative professional, and that set of customers actually feels under threat. They don’t feel more empowered. I’m just wondering how you see that, in the broadest possible sense. I am the world’s foremost, “What is a photo?” philosophical handwringer, and then I use AI Denoise in Lightroom without a second’s hesitation, and I think it’s magic. There’s something there that is very big, and I’m wondering if you see that as just a moment we’re all going to go through or something that fundamentally changes your business.

Whether you’re a student, whether you’re a business professional, or whether you’re a creative, we like to say at Adobe that you have a story to tell. The reality is that there are way more stories that people want to tell than skills that exist to be able to tell that story with the soul that they want and the emotion that they want. I think generative AI is going to attract a whole new set of people who previously perhaps didn’t invest the time and energy into using the tools to be able to tell that story. So, I think it’s going to be tremendously additive in terms of the number of people who now say, “Wow, it has further democratized the ability for us to tell that story,” and so, on the creative side, whether you’re ideating, whether you’re trying to take some picture and fix it but you don’t quite know how to do it.

When people have looked at things like Generative Fill, their jaws drop. What’s amazing to us is when, despite decades of innovation in Photoshop, something like Generative Fill captures the imagination of the community — and the adoption of that feature has been dramatically higher than any other feature that we’ve introduced in Photoshop. When layers first came out, people looked at it, and their jaws dropped. It just speaks to how much more we can do for our customers to be able to get them to tell their story. I think it’s going to be dramatically expansive.

I feel like [Google CEO] Sundar Pichai likes to say AI is more profound than electricity —

You still need electricity to run the AI, so I think they’re both interrelated.

But I honestly think “used as much as layers” is the same statement. It’s at the same level of change. It’s pretty good.

I want to drill down into some of these ideas. You have been the CEO since 2007. That’s right at the beginning of the mobile era. Many things have changed. You’ve turned Adobe into a cloud business. You started as a product manager in 1998. I’m assuming your framework for making decisions has evolved. How do you make decisions now, and what’s your framework?

I think there are a whole bunch of things that have perhaps remained the same and a whole bunch of things that are different. I think at your core, when you make decisions — whether it’s our transition to the cloud, whether it’s what we did with getting into the digital marketing business — it’s always been about: Are we expanding the horizons and the aspirations we look at? How can we get more customers to the platform and deliver more value? At our core, what’s remained the same is this fundamental belief that by investing in deep technology platforms and delivering fundamental value, you will be able to deliver, value, and monetize it and grow as a company.

I think what’s different is the company has scaled how you recognize the importance, which was always important but becomes increasingly obvious: how do you create a structure in which people can innovate and how do you scale that? At $20 billion, how do you scale that business and make decisions that are appropriate? I think that’s changed. But at my core … I managed seven people then, I manage seven people now, and it’s leveraging them to do amazing things.

That gets into the next Decoder question almost perfectly: How is Adobe structured today? How did you arrive at that structure?

I think structures are pendulums, and you change the pendulum based on what’s really important. We have three businesses: One is what we call the creative business that you touch on so much about, and the vision there is how we enable creativity for all. We have the document business, and in the document business, it’s really thinking about how we accelerate document productivity, and powering digital businesses is the marketing business. I would say we have product units. We call the first two Creative Cloud and Document Cloud as our digital media business, and we call the marketing business the digital experience business. So we have two core product units run by two presidents, Anil [Chakravarthy, president of Adobe’s digital experience business] and David [Wadhwani, president of Adobe’s digital media business]. And with the rest of the company, we have somebody focused on strategy and corporate development. Partnerships is an important part. And then you have finance, legal, marketing, and HR as functional areas of expertise.

Where do you spend your time? I always think about CEOs as having timelines. There’s a problem today some customer is having, you’ve gotta solve that in five minutes. There’s an acquisition that takes a year or maybe even more than that. Where do you spend your time? What timeline do you operate on?

Time is our most valuable commodity, right? I think prioritization is something where we’ve been increasingly trying to say: what moves the needle? One of the things I like to do — both for myself as well as at the end of the year with my senior executives — is say, “How do we move the needle and have an impact for the company?” And that might change over time.

I think what’s constant is product. I love products, I love building products, I love using our products, but the initiatives might change. A few years ago, it was all about building this product that we call the Adobe Experience Platform — a real-time customer data platform — because we had this vision that if you had to deliver personalized engaging experiences, you needed a next-generation infrastructure. This was not about the old generation of, “Where was your customer data stored?” It was more about: what’s a real-time platform that enables you to activate that data in real time? And that business has now exploded. We have tens of billions of profiles. The business has crossed $750 million in the book of business.

Incubating new businesses is hard. In companies, the power structure tends to be with businesses that are making money today. And so incubating businesses require sponsorship. Adobe Express is another product that we’ll talk about. We just released a phenomenal new version of Adobe Express on both mobile and web, which is all about this creativity for all. And so I think what are the needle-moving initiatives? Sometimes, it might be about partnerships. And as we think about LLMs and what’s happening in generative AI, where do we partner versus where do we build? While it changes, I would say there are three parts of where I spend my time.

There’s strategy because, at the end of the day, our jobs are planting the flag for where the company has to go and the vision for the company. I think it’s a cadence of execution. If you don’t execute against the things that are important for you, it doesn’t matter how good your strategy is. And the third set of things that you focus on are people. Are you creating a culture where people want to come in and work, so they can do their best work? Is the structure optimized to accomplish what is most important, and are you investing in the right places? I would say those are the three buckets, but it ebbs and flows based on the critical part. And you’re right — you do get interrupted, and having to deal with whatever is the interruption of the day is also an important part of what you do.

You said you had three core divisions. There’s the Creative Cloud — the digital media side of the business. There’s the Experience Cloud, which is the marketing side of the business, and then there’s … I think you have a small advertising line of revenue in that report. Is that the right structure for the AI moment? Do you think you’re going to have to change that? Because you’ve been in that structure for quite some time now.

I think what’s been really amazing and gratifying to us is, at the end of the day, while you have a portfolio of businesses, if you can integrate them where you deliver value to somebody that is incredible and that no other company can do by themselves, that’s the magic that a company can do. We just had a recent summit at MAX in London. We had our summit here in Las Vegas. These are our big customer events. And the story even at the financial analyst meetings is all about how these are coming together: how the integration of the clouds is where we’re delivering value. When you talk about generative AI, we do creation and we do production. We have to do these asset managements.

If you’re a marketer and you’re creating all this content, whether it’s for social, whether it’s for email campaigns, whether it’s for media placement or just TV, where is all that content stored, and how do you localize it, and how do you distribute it? How do you activate it? How do you create these campaigns? What do you do with workflow and collaboration? And then what is the analysis and insight and reporting?

This entire framework’s called the GenStudio, and it’s actually the bringing together of the cloud businesses. The challenge in a company is you want people who are ruthlessly focused on driving innovation in a competitive way and leading the market and what they are responsible for, but you also want them to take a step back and realize that it’s actually putting these together in a way that only Adobe can uniquely do that differentiates us from everybody else. So, while we have these businesses, I think we really run the company as one Adobe, and we recognize the power of one Adobe, and that’s a big part of my job, too.

How do you think about investing at the cutting edge of technology? I’m sure you made AI investments years ago before anyone knew what they could become. I’m sure you have some next-gen graphics capabilities right now that are just in the research phase. That’s pure cost. I think Adobe has to have that R&D function in order to remain Adobe. At the same time, even the cost of deploying AI is going up as more and more people use Firefly or Generative Fill or anything else. And then you have a partnership with OpenAI to use Sora in Premiere, and that might be cheaper than developing on your own. How do you think about making those kinds of bets?

Again, we are in the business of investing in technology. A couple of things have really influenced how we think about it at the company. Software has an S-curve. You have things that are in incubation and have a horizon that’s not immediate, and you have other things that are mature. I would say our PostScript business is a mature business. It changed the world as we know it right now. But it’s a more mature business. And so, I think being thoughtful about where something is in its stage of evolution, and therefore, you’re making investments certainly ahead of the “monetization” part, but you have other metrics. And you say, am I making progress against metrics? But we’re thoughtful about having this portfolio approach. Some people call it a horizon approach and which phase you’re in. But in each one of them, are we impatient for success in some way? It may be impatient for usage. It may be impatient for making technology advancements. It may be impatience for revenue and monetization. It may be impatience for geographic distribution. I think you still have to create a culture where the expectations of why you are investing are clear and you measure the success against that criteria.

What are some of the longer-term bets you’re making right now that you don’t know when they’re going to pay off?

Well, we’re always investing. AI, building our own foundation models. I think we’re all fairly early right in this phase. We decided very early on that with Firefly, we’re going to be investing in our models. We are doing the same on the PDF side. We had Liquid mode, which allowed you to make all your PDFs responsive on a mobile device. In the Experience Cloud, how do you think about customers, and what’s a model for customers and profiles and recommendations? Across the spectrum, we’re doing it.

I would say the area where we probably make the most fundamental research is in Creative [Cloud]: what’s happening with compression models or resolution or image enhancement techniques or mathematical models for that? We’ve always had advanced technology in that. There, you actually want the team to experiment with things that are further from the tree because if you’re too close to the tree and your only metric is what part of that ships, you are perhaps going to miss some fundamental moves. So, again, you have to be thoughtful about what you are. But I would say core imaging science, core video science, is clearly the area — 3D immersive. That’s where we are probably making the most fundamental research investments.

You mentioned AI and where you are in the monetization curve. Most companies, as near as I can tell, are investing a lot in AI, rolling out a lot of AI features, and the best idea anyone has is, “We’ll charge you 20 bucks a month to ask this chatbot a question, and maybe it will confidently hallucinate at you.” And we’ll see if that’s the right business. But that’s where we are right now for monetization. Adobe is in a different spot. You already have a huge SaaS business. People are already using the features. Is the use of Firefly creating any margin pressure on Creative Cloud subscribers? You’re not charging extra for it, but you could in the future. How are you thinking about that increased cost?

We have been thoughtful about different models for the different products that we have. You’re right in Creative. Think about Express versus Creative Cloud. In Creative Cloud, we want low friction. We want people to experiment with it. Most people look at it and say, “Hey, are you acquiring new customers?” And that’s certainly an important part. What’s also equally important is, if that helps with retention and usage that also, for a subscription business, has a material impact on how you engage value with customers.

Express is very different. Express is an AI-first new product that’s designed to be this paradigm change where, instead of knowing exactly what you want to do, you have a conversation with the computer: I want to create this flyer or I want to remove the background of an image or I want to do something even more exciting and I want to post something on a social media site. And there, it’s, again, about acquisition and successful exports.

You’re right in that there’s a cost associated with it. I would say for the most part, for most companies, the training cost is probably higher right now than the inference costs, both because we can start to offload the inferencing as well on computers as that becomes a reality. But it’s what we do for a living. If you are uncomfortable investing in fundamental technology, you’re in the wrong business. And we’re not a company that has actually focused on being a fast follower, let somebody else invent it. We like creating markets. And so you have to recognize who you are as a company, and that comes with the consequences of how you have to operate.

I think it remains to be seen how consumer AI is monetized. It remains to be seen even with generative AI in Photoshop. At the individual creative level, I think it remains to be seen. Maybe it will just help you with retention, but I feel like retention in Photoshop is already pretty high. Maybe it will bring you new customers, but you already have a pretty high penetration of people who need to use Photoshop.

It’s never enough. We’re always trying to attract more customers.

But that’s one part of the business. I think there’s just a lot of question marks there. There’s another part of your business that, to me, is the most fascinating. When I say Adobe is under-covered, the part of the business that I think is just fully under-covered is — you mentioned it — GenStudio. It’s the marketing side of the business, the experience side of the business. We’re going to have creatives at an ad agency make some assets for a store. The store is going to pump its analytics into Adobe’s software. The software is going to optimize the assets, and then maybe at some turn, the AI is going to make new assets for you and target those directly to customers. That seems like a very big vision, and it’s already pre-monetized in its way. That’s just selling marketing services to e-commerce sites. Is that the whole of the vision or is it bigger than that?

It’s a big part of the vision, Nilay. We’ve been talking about this vision of personalization at scale. Whether you’re running a promotion or a campaign, you’re making a recommendation on what to watch next, and we’re in our infancy in terms of what happens. When I looked and focused on how we create our own content and partner with great agencies, the amount of content that’s created, and the way to personalize that and run variations and experiment and run this across 180 countries where we might do business — that entire process from a campaign brief to where an individual in some country is experiencing that content — it’s a long laborious process. And we think that we can bring a tremendous amount of technology to bear in making that way more seamless. So I think that is an explosive opportunity, and every consumer is now demanding it, and they’re demanding it on their mobile device.

I think people talk about the content supply chain and the amount of content that’s being created and the efficacy of that piece of content. It is a big part of our vision. But documents also. The world’s information is in documents, and we’re equally excited about what we are doing with PDF and the fact that now, in Reader, you can have a conversational interface, and you can say, “Hey, summarize for me,” and then over time, how does this document, if I’m doing medical research, correlate with the other research that’s in there and then go find things that might be on my computer or might be out there on the internet. You have to pose these interesting problems for your product team: how can we add value in this particular use case or scenario? And then they unleash their magic on it. Our job is posing these hard things, which is like, “Why am I starting the process for Black Friday or Cyber Monday five months in advance? Why can’t I decide a week before what campaign I want to run and what promotion I want to run?” And enabling that, I think we will deliver tremendous value.

I promised you I would ask you a lot of questions about PDF, and I’m not going to let go of that promise, but not yet. I want to stay focused on the marketing side.

There’s an idea embedded in two phrases you just said that I find myself wrestling with. I think it is the story of the internet. It is how commercialized the internet has become. You said “content supply chain” and “content life cycle.” The point of the content is to lead to a transaction that is an advertising and marketing-driven view of the internet. Someone, for money, is going to make content, and that content will help someone else down the purchase funnel, and then they’re going to a pair of shoes or a toothbrush or whatever it is. And that I think is in tension with creativity in a real way. That’s in tension with creativity and art and culture. Adobe sits at the center of this. Everybody uses your software. How do you think about that tension? Because it’s the thing that I worry about the most.

Specifically, the tension is as a result of what? The fact that we’re using it for commerce?

Yeah. I think if the tools are designed and organized and optimized for commerce, then they will pull everybody toward commerce. I look at young creators on social platforms, and they are just slowly becoming ad agencies. Like one-person ad agencies is where a creator ends if they are at the top of their game. MrBeast is such a successful ad agency that his rates are too high, and it is better for him to sell energy bars and make ads for his own energy bars than it is for him to sell ads to someone else. That is a success story in one particular way, and I don’t deny that it’s a success story, but it’s also where the tools and the platforms pull the creatives because that’s the money. And because the tools — particularly Adobe’s tools — are used by everybody for everything, I wonder if you at the very top think about that tension and the pull, the optimization that occurs, and what influence that has on the work.

We view our job as enablement. If you’re a solopreneur or you want to run a business, you want to be a one-person shop in terms of being able to do whatever your passion is and create it. And the internet has turned out to be this massively positive influence for a lot of people because it allows them distribution. It allows them reach. But I wouldn’t underplay the —

There are some people who would make, at this point, a very different argument about the effect of the internet on people.

But I was going to go to the other side. Whether it’s just communication and expressing themselves, one shouldn’t minimize the number of people for whom this is a creative outlet and it’s an expression, and it has nothing to do with commerce and they’re not looking to monetize it, but they’re looking to express themselves. Our tools, I think, do both phenomenally well. And I think that is our job. Our job is not doing value judgment on what people are using this for. Our job is [to ask], “How do we enable people to pursue their passion?”

I think we do a great job at that. If you’re a K–12 student today, when you write a project, you’re just using text. How archaic is that? Why not put in some images? Why not create a video? Why not point to other links? The whole learning process is going to be dramatically expanded visually for billions of people on the internet, and we enable that to happen. I think there are different users and different motivations, and again, as I said, we’re very comfortable with that.

One of the other tensions I think about right now when it comes to AI is that the whole business — the marketing business, the experience business you have — requires a feedback loop of analytics. You’re going to put some content ideally on the web. You’re going to put some Adobe software on the website. You own Omniture. You own a big analytics suite that you acquired with Omniture back in the day. Then that’s going to result in some conversions. You’ll do some more tracking. You’ll sell some stuff.

That all depends on a vibrant web. I’m guessing when people make videos in Premiere and upload them to YouTube, you don’t get to see what happens on YouTube. You don’t have great analytics from there. I’m guessing you have even worse analytics from TikTok and Instagram Reels. More and more people are going to those closed platforms, and the web is getting choked by AI. You can feel that it’s being overrun by low-quality SEO spam or AI content, or it’s mostly e-commerce sites because you can avoid some transaction fees if you can get people to go to a website. Do you worry about the pressure that AI is putting on the web itself and how people are going to the more closed platforms? Because that feels like it directly hits this business, but it also directly impacts the future of how people use Photoshop.

I think your point really brings to the forefront the fact that the more people use your products, the more differentiating yourself with your content is a challenge. I think that comes with the democratization of access to tools and information. It’s no different from if you’re a software engineer and you have all this access to GitHub and everything that you can do with software. How do you differentiate yourself as a great engineer, or if you’re a business, how do you differentiate yourself with a business? But as it relates to the content creation parts —

Actually, can I just interrupt you?

I want you to talk about the distribution side. This is the part that I think is under the most pressure. Content creation is getting easier and more democratic. However you feel about AI, it is easier to make a picture or a video than it’s ever been before. On the distribution side, the web is being choked by a flood of AI content. The social platforms, which are closed distribution, are also being flooded with AI content. How do you think about Adobe living in that world? How do you think about the distribution problem? Because it seems like the problem we all have to solve.

You’re absolutely right in that, as the internet has evolved, there’s what you might consider open platforms and closed platforms. But we produce content for all of that. You pointed out that, whether it’s YouTube, TikTok, or just the open internet, we can help you create content for all of that. I don’t know that I’d use the word “choked.” I used the word “explosion” of content certainly, and “flooded” also is a word that you used. It’s a consequence. It’s a consequence of the access. And I do think that for all the companies that are in that business, even for companies that are doing commerce, I think there are a couple of key hypotheses that when they do, they become lasting platforms. The first is transparency of optics of what they are doing with that data and how they’re using that data. What’s the monetization model, and how are they sharing whatever content is being distributed through their sites with the people who are making those platforms incredibly successful?

I don’t know that I worry about that a lot, honestly. I think most of the creators I’ve spoken to like a proliferation of channels because they fundamentally believe that their content will be differentiated on those channels, and getting exposure to the broadest set of eyeballs is what they aspire to. So I haven’t had a lot of conversations with creators where they are telling us, as Adobe, that they don’t like the fact that there are more platforms on which they have the ability to create content. They do recognize that it’s harder, then, for them to differentiate themselves and stand out. Ironically, that’s an opportunity for Adobe because the question is, for that piece of content, how do you differentiate yourself in the era of AI if there’s going to be more and more lookalikes, and how do you have that piece of content have soul? And that’s the challenge for a creative.

How do you think about the other tension embedded in that, which is that you can go to a number of image generators, and if someone is distinctive enough, you can say, “Make me an image in the style of X,” and that can be trained upon and immediately lifted, and that distinction goes to zero pretty fast. Is that a tension that you’re thinking about?

Given the role that Adobe plays in the content creation business, I think we take both the innovation angle and the responsibility angle very seriously. And I know you’ve had conversations with Dana [Rao, Adobe counsel] and others about what we are doing with content credentials and what we are doing with the Fair Act. If you look at Photoshop, we’re also taking a very thoughtful approach about saying when you upload a picture for which you want to do a structure match or style match, you bear the responsibility of saying you have access to that IP and license to that IP in order to do that.

So I can interpret your questions in one of two ways. One is: how do we look at all of the different image generators that have happened? In that case, we are both creating our own image generator, but at the NAB Show, we showed how we can support other third parties. It was really critical for us to sequence this by first creating our own image model. Both because we had one that was designed to be commercially safe. It respected the rights of the creative community because we have to champion it. But if others have decided that they are going to use a different model but want to use our interfaces, then with the appropriate permissions and policies, we will support that as well.

And so I interpret your questions in those two ways, which is we’re taking responsibility in terms of when we provide something ourselves, how are we making sure that we recognize IP because it is important, and it’s people’s IP. I think at some point, the courts will opine on this, but we’ve taken a very designed-to-be commercially safe approach where we recognize the creator’s IP. Others have not. And the question might be, well, why are you supporting them in some of our products? And a lot of our customers are saying, “Well, we will take the responsibility, but please integrate this in our interfaces,” and that’s something that we are pushing as third-party models.

It bears mentioning that literally today, as we’re speaking, an additional set of newspapers has sued OpenAI for copyright infringement. And that seems like the thing that is burbling along underneath this entire revolution is, yeah, the courts are going to have to help us figure this out. That seems like the very real answer. I did have a long conversation with Dana [Rao] about that. I don’t want to sit in the weeds of that. I’m just wondering for you as the CEO of Adobe, where is your level of risk? How risky do you think this is right now for your company?

I think the approach that we’ve taken has shown just tremendous leadership by saying … Look at our own content. We have a stock business where we have rights to train the models based on our stock business. We have Behance, and Behance is the creative professional social site for people sharing their images. While that’s owned by Adobe, we did not train our Firefly image models based on that because that was not the agreement that we had with people who do it.

I think we’ve taken a very responsible way, so I feel really good about what we are doing. I feel really good about how we are indemnifying customers. I feel really good about how we are doing custom models where we allow a person in the media business or the CPG business to say, “We will upload our content to you Adobe, and we will create a custom model for us that only we can use, what we have rights for.” So, we have done a great job. I think other companies, to your point, are not completely transparent yet about what data they use and [if] they scrape the internet, and that will play out in the industry. But I like the approach that we’ve taken, and I like the way in which we’ve engaged with our community on this.

It’s an election year. There are a lot of concerns about misinformation and disinformation with AI. The AI systems hallucinate a lot. It’s just real. It’s the reality of the products that exist today. As the CEO of Adobe, is there a red line of capability that you won’t let your AI tools cross right now?

To your point, I think it’s something like 50 percent of the world’s population over a 12-month period is going to the polls, including the US and other major democracies in the world. And so, we’ve been actively working with all these governments. For any piece of content that’s being created, how does somebody put their digital signature on what the provenance of that content was? Where did it get created? Where did it get consumed? We’ve done an amazing job of partnering with so many companies in the camera space, in the distribution of content space, in the PC space to all say we need to do it. We’ve also now, I think, made the switch associated with, how do you visually identify that there is this watermark or this digital signature about where the content came from?

I think the unsolved problem to some degree is how do you, as a society, get consumers to say, “I’m not going to trust any piece of content until I see that content credential”? We’ve had nutrition labels on food for a long time — this is the nutrition label on a piece of content. Not everybody reads the nutrition label before they eat whatever they’re eating, so I think it’s a similar thing, but I think we’ve done a good job of acting responsibly. We’ve done a great job of partnering with other people. The infrastructure is there. Now it’s the change management with society and people saying, “If I’m going to go see a piece of video, I want to know the provenance of that.” The technology exists. Will people want to do that? And I think that’s—

The thing everyone says about this idea is, well, Photoshop existed. You could have done this in Photoshop. What’s the difference? That’s you. You’ve been here through all these debates. I’m going to tell you what you are describing to me sounds a little bit naive. No one’s going to look at the picture of Mark Zuckerberg with the beard and say, “Where’s the nutrition label on that?” They’re going to say, “Look at this cool picture.” And then Zuck is going to lean into the meme and post a picture of his razor. That’s what’s happening. And that’s innocent. A bunch of extremely polarized voters in a superheated election cycle is not going to look at a nutrition label. It just doesn’t seem realistic. Are you saying that because it’s convenient to say, or do you just hope that we can get there?

I actually acknowledge that the last step in this process is getting the consumer to care and getting the consumer to care [about] pieces of information that are important. To your point again, you had a couple of examples where some of them are in fun and in jest and everybody knows they’re in fun and jest and it doesn’t matter. Whereas others are pieces of information. But there is precedence to this. When we all transacted business on the internet, we said we want to see that HTTPS. We want to know that my credit card information is being kept securely. And I agree with you. I think it’s an unsolved problem in terms of when consumers will care and what percentage of consumers will care. So, I think our job is the infrastructure, which we’ve done. Our job is educating, which we are doing. But there is a missing step in all of this. We are going into this with our eyes open, and if there are ideas that you have on what else we can do, we’re all ears.

Is there a red line for you where you’ve said, “We are not going to cross this line and enable this kind of feature”?

Photoshop has actually done a couple of things in the past. I think with creating currency, if you remember, that was a place. I think pornography is another place. There’s some things in terms of content where we have drawn the line. But that’s a judgment call, and we’ll keep iterating on that, and we’ll keep refining what we do.

Alright. Let’s talk about PDF. PDF is an open standard. You can make a PDF pretty much anywhere all the time. You’ve built a huge business around managing these documents. And the next turn of it is, as you described, “Let an AI summarize a bunch of documents, have an archive of documents that you can treat almost like a wiki, and pull a bunch of intelligence out of it.” The challenge is that the AI is hallucinating. The future of the PDF seems like training data for an AI. And the thing that makes that really happen is the AIs have to be rock-solid reliable. Do you think we’re there yet?

It’s getting better, but no. Even the fact that we use the word hallucinate. The incredible thing about technology right now is we use these really creative words that become part of the lexicon in terms of what happens. But I think we’ve been thoughtful in Acrobat about how we get customer value, and it’s different because when you’re doing a summary of it and you can point back to the links in that document from which that information was gleaned, I think there are ways in which you provide the right checks and balances. So, this is not about creation when you’re summarizing and you’re trying to provide insight and you’re correlating it with other documents. It will get better, and it’ll get better through customer usage. But it’s a subset of the problem of all hallucinations that we have in images. And so I think in PDF, while we’re doing research fundamentally in all of that, I think the problems that we’re trying to solve immediately are summarization — being able to use that content and then create a presentation or use it in an email or use it in a campaign. And so I think for those use cases, the technology is fairly advanced.

There’s a thing I think about all the time. An AI researcher told you this a few years ago. If you just pull the average document off the average website, the document is useless. It’s machine-generated. It’s a status update for an IoT sensor on top of a light pole. That is the vast majority statistically of all the documents on the internet. When you think about how much machine-generated documentation any business makes, the AI problem amps it up. Now I’m having an AI write an email to you; you’re having an AI summarize the email for you. We might need to do a transaction or get a signature. My lawyer will auto-generate some AI-written form or contract. Your AI will read it and say it’s fine. Is there a part where the PDF just drops out of that because it really is just machines talking to each other to complete a transaction and the document isn’t important anymore?

Well, I think this is so nascent that we’ll have different kinds of experiences. I’ll push back first a little — the world’s information is in PDF. And so if we think about knowledge management of the universe as we know it today, I think the job that Adobe and our partners did to capture the world’s information and archive it [has] been a huge societal benefit that exists. So you’re right in that there are a lot of documents that are transient that perhaps don’t have that fundamental value. But I did want to say that societies and cultures are also represented in PDF documents. And that part is important. I think — to your other question associated with “where do you eliminate people even being part of a process and let your computer talk to my computer to figure out this deal” — you are going to see that for things that don’t matter, and judgment will always be about which ones of those matter. If I’m making a big financial investment, does that matter? If I’m just getting an NDA signed, does that matter? But you are going to see more automation I think in that particular respect. I think you’re right.

The PDF to me represents a classic paradigm of computing. We’re generating documents. We’re signing documents. There are documents. There are files and folders. You move into the mobile era, and the entire concept of a file system gets abstracted. And maybe kids, they don’t even know what file systems are, but they still know what PDFs are. You make the next turn. And this is just to bring things back to where we started. You say AI is a paradigm shift, and now you’re just going to talk to a chatbot and that is the interface for your computer, and we’ve abstracted one whole other set of things away. You don’t even know how the computer is getting the task done. It’s just happening. The computer might be using other computers on your behalf. Does that represent a new application model for you? I’ll give you the example: I think most desktop applications have moved to the web. That’s how we distribute many new applications. Photoshop and Premiere are the big stalwarts of big, heavy desktop applications at this point in time. Does the chatbox represent, “Okay, we need yet another new application model”?

I think you are going to see some fundamental innovation. And the way I would answer that question is first abstracting the entire world’s information. It doesn’t matter whether it was in a file on your machine, whether it was somewhere on the internet, and being able to have access to it and through search, find the information that you want. You’re absolutely right that the power of AI will allow all of this world’s information to come together in one massive repository that you can get insight from. I think there’s always going to be a role though for permanence in that. And I think the role of PDF in that permanence aspect of what you’re trying to share or store or do some action with or conduct business with, I think that role of permanence will also play an important role. And so I think we’re going to innovate in both those spaces, which is how do you allow the world’s information to appear as one big blob on which you can perform queries or do something interesting? But then how do you make it permanent, and what does that permanence look like, and what’s the application of that permanence? Whether it’s for me alone or for a conversation that you and I had, which records that for posterity?

I think both of these will evolve. And it’s areas that — how does that document become intelligent? Instead of just having data, it has process and workflow associated with it. And I think there’s a power associated with that as well. I think we’ll push in both of these areas right now.

Do you think that happens on people’s desktops? Do you think it happens in cloud computing centers? Where does that happen?

Both and on mobile devices. Look at a product like Lightroom. You talked about Denoising and Lightroom earlier. When Lightroom works exactly the same across all these surfaces, that power in terms of people saying, oh my God, it’s exactly the same. So I think the boundaries of what’s on your personal computer and what’s on a mobile device and what’s in the cloud will certainly blur because you don’t want to be tethered to a device or a computer to get access to whatever you want. And we’ve already started to see that power, and I think it’ll increase because you can just describe it. It may not have that permanent structure that we talked about, but it’ll get created for you on the fly, which is, I think, really powerful.

Do you see any limits to desktop chip architectures where you’re saying, “Okay, we want to do inference at scale. We’re going to end up relying on a cloud more because inference at scale on a mobile device will make people’s phones explode”? Do you see any technical limitations?

It’s actually just the opposite. We had a great meeting with Qualcomm the other day, and we talked to Nvidia and AMD and Qualcomm. I think a lot of the training, that’s the focus that’s happening on the cloud. That’s the infrastructure. I think the inference is going to increasingly get offloaded. If you want a model for yourself based on your information, I think even today with a billion parameters, there’s no reason why that just doesn’t get downloaded to your phone or downloaded to your PC. Because otherwise, all that compute power that we have in our hands or on our desktop is really not being used. I think the models are more nascent in terms of how you can download it and offload that processing. But that’s definitely going to happen without a doubt. In fact, it’s already happening, and we’re partnering with the companies that I talked about to figure out how that power of Photoshop can actually then be on your mobile device and on your desktop. But we’re a little early in that because we’re still trying to learn, and the model’s getting on the server.

I can’t think of a company that is more tied to the general valence of the GPU market than Adobe. Literally, the capabilities you ship have always been at the boundary of GPU capabilities. Now that market is constrained in different ways. Different people want to buy GPUs for vastly different reasons. Is that something you’re thinking about: how the GPU market will shape as the overwhelming financial pressure to optimize for training begins to alter the products themselves?

For the most part, people look at the product . I don’t know anybody who says, “I’ve got enough processing power,” or “I’ve got enough network bandwidth,” or “I’ve got enough storage space.” And so I think all those will explode – you’re right. We tend to be a company that wants to exploit all of the above to deliver great value, but when you can have a conversation with [Nvidia CEO] Jensen [Huang] and talk about what they are doing and how they want to partner with us, I think that partnership is so valuable in times like this because they want this to happen.

Shantanu, I think we are out of time. Thank you so much for being on Decoder. Like I said, you were one of the first names I ever wrote down. I really appreciate you coming on.

Thanks for having me. Really enjoyed the conversation, Nilay.

Decoder with Nilay Patel /

A podcast about big ideas and other problems.


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