Canva Hits AI Speedbump on Costs, ChatGPT Competition

Executives at Canva, the design software app with more than 200 million users, had high hopes for a rollout of AI tools that marked the biggest product launch in the startup’s 13-year history. Instead, the privately held company has dealt with a series of stumbles related to AI. First, the unexpected popularity of new AI features drove up the company’s costs and forced it to slow its introduction of those features to more users. The company slashed its revenue growth forecast for the year to 20%, executives told investors this week.

Another previously unreported issue caught the eye of executives. The company noticed that more of its users in recent months had turned to ChatGPT instead of Canva after OpenAI rolled out a new image model in April that was better at creating useful designs for things like posters, according to a person with knowledge of the situation.