Cisco, NFL And The Premier League Are Picking Adobe Over OpenAI Because of Its 'Commercially Safe' Models Says ADBE's David Wadhwani

The new generative AI offerings of Adobe Inc. ADBE are finding a lot of takers among enterprise customers, who prioritize intellectual property safety.

What Happened: During the company’s second quarter results on Thursday, Adobe’s President of Digital Media, David Wadhwani, highlighted that customers are choosing Firefly not just for its creative capabilities, but because of the legal safeguards built into the product.

“We have trained our Firefly models, as many of you know, on stock and other content that we have access to,” he said, adding that the company has a “contributor fund” that pays out to creators of stock and other content used in its models, thus sidestepping the IP risks that other generative AI models face.

According to Wadhwani, the strategy is resonating well in boardrooms, with a lot of companies selecting Adobe’s Firefly generative AI solution because of the “safety of it.”

While the company didn’t explicitly link any new customer wins to this strategy, it did highlight a string of high-profile enterprise adoptions tied to its Firefly and GenStudio platforms during the quarter.

“Select key global customer wins include Cisco, County of Los Angeles, the Defense Information Systems Agency, Macy's [and] Ulta Beauty," the company said, also noting that “top sports leagues like MLB, the NFL, and Premier League” had joined its growing roster of clients.

Emphasizing the need for IP-safe tools in enterprise content creation, the company’s CEO, Shantanu Narayen, said, “You're not going to use something that's not been designed to be intellectually… yeah, the intellectual property being correct. For production.”

Why It Matters: This comes amid growing concerns of copyright infringement by generative AI tools such as Midjourney and OpenAI.

Early this week, the Walt Disney Co. DIS and Comcast Corp.’s CMCSA Universal Studios filed a lawsuit against MidJourney, calling the platform a “bottomless pit of plagiarism.”

Several other GenAI platforms have faced threats of lawsuits in recent years, including OpenAI and Microsoft, from the New York Times Co. NYT and Rupert Murdoch’s Dow Jones and New York Post, initiating proceedings against the Jeff Bezos-backed Perplexity AI.

During its second quarter results on Thursday, Adobe reported $5.87 billion in revenue, ahead of consensus estimates at $5.79 billion. Profits stood at $5.06 per share, beating estimates of $4.96 per share.

Price Action: Adobe’s shares were up 0.20% on Thursday, ending the day at $413.68, but are down 2.10% after hours, following its second quarter earnings.

According to Benzinga’s Edge Stock Rankings, Adobe shares score well on Growth, but lag on most other metrics, with a favorable short-term price trend. Click here for deeper insights into the stock.

Read More: