Adobe president Anil Chakravarthy on customer experience orchestration, the SEMrush close, and competing in the AI creative tools era

all this stuff. Well, uh, we have the perfect person to talk about AI imagery, AI, generative AI, uh, creative tooling and more because we are joined by Anneil from Adobe where he is the president. So, let's bring in Anneil. How are you doing? Welcome to the show.

Thank you for having me on. It's great to be back on TPN and congrats on your acquisition. Great.

Thank you. It's great to see you.

Great to see you again. Uh I would love to just get a general update on what has changed with Adobe. What has what have you been working on since the last time we spoke?

Yeah, look I'm coming to you from Adobe Summit. We are here in Las Vegas. You know, big show, 14,000 people. Uh you were just talking about Jensen. Jensen was here on Monday and really talking about how Nvidia and Adobe are working together and you were just talking about 3D. I caught the tail end of your comments there and that's actually one of the big things we announced is how do you have digital twins um so that you can take the digital twin and carry it all the way from product design into marketing and customer experience. So you know with HP for example uh they have 15,000 new SKs every uh every year with all the products they have and they're working with us and with Nvidia and to bring it together into into marketing. So we are super excited about you know what we call customer experience orchestration which is how do you use AI how do you use all the software you have

to deliver personalized experiences how do you bring the right content the right data about the customer uh and then put that into the channel that they care about and u and and really get the most out of the customer life cycle build loyalty that's what we're

that's the big topic of the conference here

yeah uh walk me through that HP example because if if if they have a a skew, uh I imagine that there's a CAD file at some point and then they might want to instantiate that in in text or imagery or video or 3D rendering and they might want to go over to uh one of your 3D products or bridge to another. uh how how important is Adobe at the center of like uh asset management and actually creating some sort of abstraction on top of what the actual core item is versus just translating from one sort of output to the next in the way that someone might take uh a PNG from Photoshop and drop it into Premiere Pro.

No, no, that's exactly right. So they start with the uh the 3D uh image that they have or the 3D uh ren uh uh as you said a CAD file.

Yeah.

From that what we do is we create the digital twin.

Okay.

And then we apply the brand intelligence on their behalf. So in HP's case for example if it's a new PC that they are releasing

they have all kinds of things on what they want when the uh when they say it's a it's a laptop and the laptop is open. What's the kind of image they want on the laptop? What's the kind of lighting they want on the laptop? And then they release it all over the world. So there's pictures of people they always want to show a business professional in the laptop. That's the the along with the laptop. They want them showing them using the laptop to do something. So they have all kinds of brand guidelines of course, but then there's a lot of tribal knowledge on what makes an ad successful

and it's not only for them. Then they have to get all of that traveling through the entire marketing campaign because one of the big problems has been you know in the in the current world they use the 3D uh CAD files for everything in manufacturing and so on but the marketing the content starts with a photo shoot they're not actually using the 3D u uh CAD file that they have the source of truth and that's what we're you know enabling them to do use the source of truth so that the the uh images are completely completely high fidelity. They are brand preserving

but then you can generate everything around that. You can generate the background, you can generate the foreground, you can generate the users and then of course you can do what we call transcreation which is the translation into different languages. All of that can be generated

based on their brand guidelines and what works for their brand. So is your relationship with Nvidia that you want to marshall enough compute that you can be delivering inference to a customer? Because I remember using contentaware fill back in the day. It ran locally on my device. As the models get more compute inensive, they eventually won't run on device. They'll run in the cloud. I know you have API partnerships, but is there a vision to deliver inference to the customer all in one go? Exactly. It depends on the campaign. Let's say HP is running a back to school campaign.

Then they want a set of imagery. They want a set of things that they can transfer over to their channel partners

along with accurate product data.

Uh or if they're running for example a holiday campaign, a different set of imagery and so on so forth. So depending on the campaign, depending on the geography, depending on the customer segment,

making sure that they have the right campaign that is obviously the content, but it's also the product data. making sure that that's super accurate because it's got to match what exactly the customer is buying and then anything that's relevant for the particular channel partner. It could be through their own direct channels but it could equally be through CDW or through other channels and they want to make sure that the entire thing carries over. So that's what we're doing for them is not getting the workflow right,

getting the Adobe brand intelligence, which is one of the big things that we announced uh this week at Summit,

getting all of that together so that they can have a single seamless marketing workflow and get the benefit of both AI and the 3D technology together. Jord,

uh you guys announced a big uh buyback uh this week and and uh that that's been exciting, but uh what do you think you need to do from a result standpoint to show that you guys are an AI beneficiary versus a versus a victim, right? Because the narrative is obviously against you.

Uh the market has has spoken. Uh but at the same time, AI is a powerful creative tool. you guys have massive distribution into, you know, millions of individuals and businesses and so uh I think people are waiting to actually see see the story in the numbers and there's like only so much you can say to kind of like give people confidence but how are you thinking about it?

Yeah, exactly. As you said, we announced a $25 billion buyback. That is a a signal of our confidence of uh you know, this is going to continue to be a very profitable business for years to come. And we wanted to make sure that everybody in the market knew that. Uh and you know, look, I think to your point, first step for us is AI adoption uh and making sure that AI is delivering real value whether it's to individuals and real value to users or to enterprise customers like we were just talking about. And for us, what what that means is how do you really embed it into the tooling so seamlessly whether you are a marketer, whether you're a creative or whether you're a business professional using Acrobat, that AI works for you flawlessly. Uh and it does what you want. I I love the example from the last show that you had, which is sometimes you do want the the horse riding the astronaut. That was an interesting concept. But you know that may be but we have a lot of customers like Home Depot that just want sawdust and nails and that's that's what makes their campaigns authentic.

Sure.

So depending on what the customer wants, depending what the user wants, making sure that AI is helping them get value, not AI is getting in the way. Mhm.

That's our focus right now is just making sure that customers whether they are enterprises, individuals, small businesses, students understand that AI is critical to the next generation of uh of uh creative platforms and marketing platforms and tools, but it's in the context of what they're using. It brings the UI, the agentic uh the agents and the reasoning, the models and the data all together to work for them. So that's I think we've made a we made a lot a lot of strides on that front here at summit in over the last couple of years. I think as as the results show one thing for us is I think from where we are in the market for the market even to see us continuing to the performance that we've had we're a double digit grower you know we have very healthy margins even continuing to see that for the next couple of years

I think will change a lot of minds uh and then I think uh we also see the opportunity through customer experience orchestration

uh to reach a real inflection point so that's that's what we're looking to do

Jordy you can

yeah I was going to ask how how are what's your M&A outlook? It seems like there's a ton of really talented teams building building creative tools that could could fit into to Adobe. Sure.

Uh hopefully, you know, you're spending a lot on the buyback, but uh hopefully there's still some uh dry powder

uh for some talented teams.

We we do. We we have plenty of dry powder. We uh we haven't overextended ourselves. In fact, we are uh really pleased. We just announced that we have uh received all the regulatory approvals for SEMrush and we are in the in the in the waiting period to close it. So uh in the next few weeks we'll be closing Seamrush and we're super excited about that because Semrush along with our portfolio solves a real problem for uh marketers. You know marketers I mean we heard a lot from customers at Summit. Every brand is like how do I show up in the right way through open AI through Chad through Chad GPD obviously but through claude and Gemini and perplexity and gra uh how do I don't even know how consumer they know consumers are going there in droves

what they don't know is what are they even prompting for that I should be I should know about so if I'm a brand in the cosmetics world

how are they what are they actually prompting and I don't even know what they're prompting for that I should be aware of. Then how should I make sure what do I need to do to make sure that I am included in the response and then what do I need to do to make sure that I'm included in the response in an accurate manner and then how do I get that traffic coming to me

or how do I close the sale right there if I if if it's something that I can close right there. This is a new world for marketers. They have marketers have no idea how this whole thing works. I mean they they don't know for example what happens when you put in a prompt into chat GPD. What is the queries that get kicked off? Where does it get kicked off to? How is that information assembled? How does it impact their brand? They don't know the first thing about it is what they're telling us. And they're saying Adobe help us. Uh I I'm I'm interested to see how how this category plays out because there's obviously a bunch of companies doing uh they call it answer engine optimization AEO or or GIO whatever they're calling it. But the big question was always uh this feels like a very natural thing for someone like a Semrush to enter in a big way. They already have the distribution. So it'll be an interesting battle uh between Seamrush and some of the upstarts like uh Profound and some other players. Well, I think the battle will be over pretty soon according to me.

There we go.

I think James I think James are profound. We should have you guys both on and go and go at it.

That's great. Uh I I I want to talk about video. Uh so I mean we saw OpenAI pulled back from Sora. There are some really amazing models that are happening. Some of them are in China. There's a whole bunch of IP stuff. Uh what I'm interested in is that um uh Photoshop continues to be an important tool even in a Gen AI world. Uh because there's so many fine details, having Gen AI as just one possible tool is valuable. The models are getting better. We're 3 years into this boom, but video is moving slower. It's more inference demand. And I'm wondering about how you're taking lessons learned and strategies that you applied to the evolution of Photoshop, how that integrates with different model providers, different tools, different in-house solutions, and how you're planning to bring that to After Effects and and uh Premiere because this feels like a place where you would need even more opinionated editing like we're nowhere near textbox editing like you know two like 40 hours of video into a movie like that's just not like we're so far from that.

Exactly. So look, this is where I we believe Adobe brand intelligence will be a huge differentiator because that's what then okay

gives us the right information to pass on to the creatives to say this is how this is the kind of how you use the Adobe creative agent and this is how where you want to let the AI be uh take over and this is where you want to be opinionated. I mean what we have done is provided that flexibility. you know, we we announced over 30 integrations now, you know, whether it's runway or flux and obviously Google with both VO and uh and and Nano Banana, etc. So, we we've been very open and we're very open to integrating any other models that come up as well.

The key though is the creative themselves. If you're working for a brand, I mean, if you're working for I mentioned Home Depot earlier, or if you me working for Coca-Cola and so on, they don't have enough information by themselves, unless they really get a really super detailed creative brief on what exactly to uh where they need to take control where they can let the AI run.

Yeah,

we believe we can automate that and provide the right information at the right time to the creative. They can bring the brand idea, they can bring the hero asset, they can bring the creative idea and then you can apply the intelligence and exactly to your point, you can be a lot more opinionated in what you produce.

Yeah. Yeah. It is very fascinating that we got like fully generated video before we got a tool that puppeteers Premiere Pro in a way that can sync up music and edit to a beat and make cuts just on normal nonI generated footage. That's just the nature of uh computer use and whatnot. So, uh I'm sure it's an exciting time. Uh lots to build, lots to work on. Uh congratulations on all the progress.

Great to get the update.

Yeah. Thanks so much for taking the time.

Good to see you.

Thank you for having me on.

We'll talk to you soon. Cheers. Have a good one. Goodbye.

Up next, we have

one one like quick quick thought. I think like right right now

like already Yeah. the great image models, the nano bananas, the the images too. It is like you're just talking to somebody who is a digital guy or girl who is very good at Photoshop.

Like that is the experience today. Y and uh it was not that way 12 months ago. It is that way now. I no longer need Photoshop.

I don't need to go to Fiverr to say like, "Hey, I need somebody that's good at Photoshop." I don't need to text like Ben and be like, "Hey, can you help me Photoshop this?" And you can just actually just prompt your way. You do not need any UI anymore.

That's true. That's true.

For for the average for the average

for for Yeah. I mean, we are we are

and I'm just saying that's going to get that's going to get there with video where you just have a timeline and you can click on a scene.

Speed is really really important here. like like if you if there's one word that's wrong on an image and you need to regenerate it, you're going to wait 45 seconds and it will be faster to to have done that in just a you know traditional workflow. Now it's getting faster.

It's so fast now.

It's it's very fast.

But if you're if you're creating a two-hour podcast and you say, "Oh, I want you to cut to Jordy in minute 45 and it has to go regenerate the entire thing." Like that is slow. You're going to need to puppeteer the tools. You're gonna need to you're gonna need tool use in here. I I I I think I don't know. Uh just because

I was just I was just shocked because I was I was playing around with like generating

product photography and you're able to say like put the text here,