Figma files for an (A)IPO with prospectus that mentions AI 150+ times

Warns investors its codebase is harder to maintain as it bakes in brainboxes

Web design tools developer Figma on Tuesday filed with the US Securities and Exchange Commission to propose an initial public offering of company shares.

The company prospectus mentions AI more than 150 times, characterizing it both as a creative accelerant and a potential threat.

Figma cautions that its own use of AI could make its software more complicated to maintain

The Form S-1 filing arrives a year and a half after software giant Adobe abandoned its bid to acquire Figma for $20 billion. Regulators in Europe and the United Kingdom challenged the takeover as anticompetitive.

Adobe and Figma disagreed with regulators' objections but ultimately abandoned the deal, with Adobe paying a $1 billion termination fee.

Adobe has since fought a lawsuit brought by the US Federal Trade Commission, which feels its software subscriptions are too difficult to cancel. In May, the software maker failed in its bid to have the case dismissed.

Back to Figma, whose prospectus says that as of the first three months of 2025 it has 13 million monthly active users.

For the year that ended on December 31, 2024, Figma reported revenue of $749 million, up 48 percent year-on-year from the prior year. And for the three months that ended March 31, 2025, the company reported revenue of $228 million, up 46 percent year-on-year.

In the four year period that ended last December, the company claims a compound annual growth rate of 53 percent.

Figma was valued at $12.5 billion a year ago based on an investment round from Coatue Management, Alkeon Capital Management, and General Catalyst Partners, but as is customary with initial filings, has not yet determined how many shares it intends to sell at what price, which would determine its public-market valuation.

But can we talk about AI a little bit?

The prospectus talks up the various ways that the design biz has added AI features over the past few years.

"AI has the power to accelerate the process of going from idea to product even further by helping users of all skill levels explore and iterate on ideas more quickly, while automating rote, repetitive tasks," the prospectus says, citing features that help users generate interfaces or rename layers with a prompt.

AI could also allow more non-designers to use Figma, a trend the company says its own research supports.

The prospectus also mentions AI many times in the obligatory risk boilerplate, citing the potential impact of AI on the software creation industry and on how it might affect demand for the company's products and services.

AI integration into other software could, for example, reduce the need for Figma, which would affect revenue and growth.

Figma cautions that its own use of AI could make its software more complicated to maintain. And the company says that, at least in the short term, AI will be costly.

"For example, in the short term, we expect that our AI investments and use of AI technologies, including as part of Figma Make and our Figma AI features, will negatively impact our gross margins and operating margins and, given the newness of and rapid development of these technologies, the impacts on our gross margins and operating margins, and on our business, operating results, financial condition, and future prospects over the longer term, are currently unknown," the prospectus explains.

According to Figma, a substantial portion of the $17.2 million (33 percent) increase in R&D spending during the first three months of the year, compared to the same period a year prior, was due to $12 million in increased headcount and bonuses. The prospectus also mentions "a $2.6 million increase in technical infrastructure and hosting costs, primarily driven by AI related costs as we improve and extend our product offerings and develop new technologies, and $1.7 million of higher software subscription fees."

For the full 2024 year, R&D spending increased $586.3 million, or 356 percent. That includes $578.0 million of higher employee-related costs, largely due to a $509.4 million increase in stock-based compensation expenses. There was also $4.6 million in higher software subscription fees and $2.7 million more in technical infrastructure and hosting expenses, "primarily driven by AI related costs."

Several paragraphs explore the potential ethical, legal, regulatory, and reputational challenges arising from the use of AI technologies. There's also mention of the risk of being unable to hire the necessary AI talent.

"We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications at a suitable cost, and this risk may be exacerbated by factors related to, among other things, increased recruiting efforts by other companies," the prospectus warns.

Despite the potential risks, Figma says it's committed to AI.

"We were founded to help anyone go from imagination to reality, and we believe that AI is critical to delivering our vision," the financial filing states.

With so many companies making huge financial bets on AI, fear of being left behind appears to have eclipsed concerns that AI won't deliver. ®