Figma stock slides 12% as Google debuts AI design tool

Figma, a United States-based design software maker, saw its shares fall about 12% over two trading days after Google introduced a new AI design tool.

The search engine giant said Stitch – still in beta without charge and has not promised wider availability – can create designs from prompts and offer real-time, voice-enabled critiques.

Shares dropped 8% on Wednesday and more than 4% on Thursday, leaving the stock down roughly 35% year-to-date amid a broader selloff in software stocks.

The move raised concerns that Google could pull more of the design workflow into its enterprise ecosystem if the feature becomes a paid service.

Figma went public in July 2025 and in October 2025 expanded a partnership with Google Cloud to add generative AI features, including integrations of Anthropic and Google models into its Make tool.

Adobe’s planned US$20 billion acquisition of Figma in 2023 was terminated after regulatory hurdles.

🔗 Source: CNBC

🧠 Food for thought

Implications, context, and why it matters.

Stitch offers a full toolset with a $0 price tag

Google Stitch rebrands Galileo AI, a text-to-UI tool (software that turns written prompts into user interface designs) that Google acquired in May 2025 1.
Pricing moved from Galileo’s paid plan, which reached $39 per month, to a free tier with up to 350 design generations per month in Standard mode 1.
Stitch can turn rough sketches into screens, outline full user flows, and export straight to HTML/CSS code (the standard building blocks for web pages) rather than only design files 1.
Hands-on reviews find that results often miss basic accessibility standards, plus layouts can look too similar, so human review stays necessary before shipping a usable product 1.

Google is pushing design into a broader build stack

Rivals face more than one product since Google can draw more of the design workflow into its enterprise ecosystem if Stitch later becomes paid 2.
Google’s public AI Studio roadmap lists planned additions such as “Figma integration,” “better GitHub support,” and “Google Workspace integration” 3.
Those plans line up with a future where standalone design apps shift into a feature inside a larger platform 3.
Investors have responded to the wider risk to incumbents beyond Figma, with Adobe shares down about 4% over the past two days 2.