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Adobe down 40%: Kodak moment?

Adobe’s stock has spent the summer trading roughly 40% below its 52-week high, a striking reversal for a company long treated as a bellwether of the creative economy. The sell-off reflects a convergence of pressures: intensifying AI-driven competition, regulatory scrutiny of subscriptions, controversial pricing changes, and a shifting center of gravity from applications to underlying AI infrastructure. The question hanging over the market is whether Adobe faces a Kodak-style disruption—or is merely navigating a bruising but temporary reset.

The slide behind the headline
As of mid-August, shares remain about 40% beneath last year’s 52-week high, underscoring how swiftly sentiment has flipped from euphoria around generative AI to worries about commoditization. The drop has also been amplified by analyst downgrades that argue value may be migrating from application-layer software to AI infrastructure and platforms.

Competitive shock: AI eats software (and design)
The rise of text-to-image and text-to-video tools has lowered creative barriers for individuals and enterprises alike. Web-first design platforms and AI-native video apps are courting Adobe’s core audience with lower prices, simpler workflows, and collaborative features that feel “good enough” for many use cases. Adobe’s aborted attempt to buy a fast-growing design rival left that competitor independent—and emboldened. Meanwhile, a separate deal created a powerful alternative bundle for creative pros by combining a mass-market design platform with a full professional suite.

Pricing, packaging and customer trust
Adobe is hiking and repackaging parts of Creative Cloud, rebranding “All Apps” to “Creative Cloud Pro” with expanded generative features. For some customers, the shift promises more AI value; for others, it reinforces “subscription fatigue” and raises the risk of churn to cheaper alternatives. Compounding the perception problem, U.S. regulators have sued Adobe over alleged “dark patterns” in subscription cancellations—claims the company denies. Regardless of the legal outcome, the episode has kept pricing and trust squarely in the headlines.

Product reality check: far from standing still
It would be a mistake to equate a falling share price with a failing product engine. Adobe continues to ship at pace: newer Firefly models add higher-fidelity image generation and expanding video features; core apps like Photoshop, Illustrator and Lightroom keep absorbing AI-assisted tooling; and the company is pushing “content credentials” and indemnities aimed at enterprises wary of copyright risk. Under the hood, the financial machine still hums: record quarterly revenue, double-digit growth in its Digital Media segment, and a large recurring-revenue base suggest substantial resilience.

Buybacks vs. disruption
Management has been retiring shares under a multi-year, $25 billion repurchase authorization—classic playbook for signaling confidence and supporting EPS. But buybacks don’t answer the existential question: if AI ultimately turns many creative tasks into commodity services, can Adobe preserve pricing power and premium margins at application level?

Is this really a “Kodak moment”?
Kodak’s mistake wasn’t missing a feature—it was clinging to a cash-cow business model while the medium itself changed. Adobe’s risk rhymes, but is not identical:

- The bear case: If AI creation and editing consolidate into low-cost, browser-based suites and assistants embedded by cloud and OS giants, Adobe’s subscription pricing could face sustained pressure. Regulatory and reputation hits around subscriptions or data use could accelerate defections at the margin.

- The bull case: Creative workflows remain multi-step, brand-sensitive, and quality-obsessed. Enterprises still prize compliance, provenance, and integration across design, marketing, and document ecosystems—areas where Adobe is deeply entrenched. If Firefly and Acrobat AI become indispensable “copilots,” Adobe can monetize AI inside a platform customers already trust.

- Most likely near-term: A grind. Revenue and ARR continue to grow at a healthy clip, but multiples reflect uncertainty about long-run AI economics. Execution on pricing, retention, and enterprise AI value will decide whether this reset becomes a rerating upward—or a slow leak. Enterprise AI adoption of Firefly and Acrobat AI (features used at scale, not just trials). Regulatory outcomes in the U.S. subscription case and any spillover into practices globally.

Partner ecosystem—how deeply Adobe’s AI models integrate with (or get displaced by) hyperscaler stacks. Adobe’s 40% drawdown signals a market repricing of app-layer software in the AI era—not proof of a Kodak-style collapse. The company still has brand, distribution, and cash flow on its side. Whether that’s enough will depend less on dazzling demos and more on something prosaic: making AI raise productivity, reduce friction, and earn its keep for paying customers.

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Stargate project, Trump and the AI war...

In a dramatic return to the global political stage, former President Donald J. Trump, as the current 47th President of the United States of America, has unveiled his latest initiative, the so-called ‘Stargate Project,’ in a bid to cement the United States’ dominance in artificial intelligence and outpace China’s meteoric rise in the field. The newly announced programme, cloaked in patriotic rhetoric and ambitious targets, is already stirring intense debate over the future of technological competition between the world’s two largest economies.According to preliminary statements from Trump’s team, the Stargate Project will consolidate the efforts of leading American tech conglomerates, defence contractors, and research universities under a centralised framework. The former president, who has long championed American exceptionalism, claims this approach will provide the United States with a decisive advantage, enabling rapid breakthroughs in cutting-edge AI applications ranging from military strategy to commercial innovation.“America must remain the global leader in technology—no ifs, no buts,” Trump declared at a recent press conference. “China has been trying to surpass us in AI, but with this new project, we will make sure the future remains ours.”Details regarding funding and governance remain scarce, but early indications suggest the initiative will rely heavily on public-private partnerships, tax incentives for research and development, and collaboration with high-profile venture capital firms. Skeptics, however, warn that the endeavour could fan the flames of an increasingly militarised AI race, raising ethical concerns about surveillance, automation of warfare, and data privacy. Critics also question whether the initiative can deliver on its lofty promises, especially in the face of existing economic and geopolitical pressures.Yet for its supporters, the Stargate Project serves as a rallying cry for renewed American leadership and an antidote to worries over China’s technological ascendancy. Proponents argue that accelerating AI research is paramount if the United States wishes to preserve not just military supremacy, but also the economic and cultural influence that has typified its global role for decades.Whether this bold project will succeed—or if it will devolve into a symbolic gesture—remains to be seen. What is certain, however, is that the Stargate Project has already reignited debate about how best to safeguard America’s strategic future and maintain the balance of power in the fast-evolving arena of artificial intelligence.

Truth: The end of the ‘Roman Empire’

The fall of the Roman Empire in the fifth century AD has long captivated historians and the public alike. For centuries, scholars have debated the precise causes of the Empire’s decline, offering myriad explanations—ranging from political corruption and economic instability to moral degeneration and barbarian invasions. Yet despite the passage of time and the wealth of research available, there remains no single, universally accepted answer to the question: why did the Roman Empire truly collapse?A central factor often cited is political fragmentation. As the Empire grew too vast to govern effectively from one centre, Emperor Diocletian introduced the Tetrarchy—a system dividing the realm into eastern and western halves. While initially intended to provide administrative efficiency, this division ultimately paved the way for competing centres of power and weakened the unity that had long defined Roman rule. Frequent changes of leadership and civil wars further sapped the state’s coherence, undermining confidence in the imperial regime.Economics played an equally crucial role. Burdened by expensive military campaigns to protect ever-extending frontiers, the Empire resorted to debasing its currency, provoking rampant inflation and eroding public trust. The resulting fiscal strains fuelled social unrest, as high taxes weighed heavily upon small farmers and urban dwellers alike. Coupled with declining trade routes and resource depletion, these pressures contributed to a persistent sense of crisis.Compounding these challenges was the growing threat from beyond Rome’s borders. Germanic tribes such as the Visigoths, Vandals, and Ostrogoths gradually eroded the Western Empire’s defensive capabilities. While earlier Roman armies proved formidable, internal discord had dulled their edge, allowing external forces to breach once-impenetrable frontiers.Modern historians emphasise that the Empire did not fall solely because of barbarian invasions, moral decay, or fiscal collapse; instead, its downfall was the outcome of a confluence of factors, each interacting with the other. The story of Rome’s fall thus serves as a stark reminder that even the mightiest of civilisations can succumb to the inexorable weight of political, economic, and social upheaval.

Malaysia's Strategic Ascent

Malaysia has long been a significant player in Southeast Asia, but recent developments have positioned it as one of the most strategic economies in the entire Asian region. Through a combination of robust infrastructure, strategic geographic positioning, proactive government policies, and a diversified economic base, Malaysia is emerging as a pivotal hub for trade, investment, and innovation. Its ability to navigate global challenges while maintaining steady growth underscores its rising influence in Asia’s economic landscape.A Remarkable Economic TransformationSince gaining independence in 1957, Malaysia has undergone a profound economic transformation. Once reliant on agriculture and commodity exports such as rubber and tin, the country has successfully diversified into a manufacturing and service-based economy. Today, Malaysia is a leading exporter of electrical appliances, parts, and components, with its manufacturing sector serving as a cornerstone of economic growth. This shift has elevated Malaysia from a low-income to an upper-middle-income nation within a single generation, a feat that few countries have achieved so rapidly. The country’s gross national income (GNI) per capita has grown impressively over the decades, reflecting sustained economic momentum.Global Trade and ConnectivityA key factor in Malaysia’s rise is its extensive global trade connections. The country engages with 90 percent of the world’s nations, surpassing many of its regional counterparts in trade openness. This has driven employment creation and income growth, with approximately 40 percent of jobs linked to export activities. Malaysia’s strategic development policies, which focus on outward-oriented, labour-intensive growth and investments in human capital, have ensured macroeconomic stability. The government’s emphasis on credible economic governance has also played a crucial role in maintaining investor confidence.Vision for a High-Income FutureIn recent years, Malaysia has set its sights on becoming a high-income, developed nation while ensuring sustainable shared prosperity. The government’s National Investment Aspirations (NIA), adopted in 2021, has been instrumental in reshaping the country’s investment landscape. The NIA prioritises foreign direct investment (FDI) that enhances local research and development (R&D), generates high-income jobs, and integrates Malaysia into global supply chains. This framework has laid the foundation for the New Industrial Master Plan, which aims to further boost Malaysia’s economic complexity and innovation.World-Class InfrastructureMalaysia’s infrastructure is another critical asset. The country boasts one of the most developed infrastructures in Asia, with a telecommunications network second only to Singapore’s in Southeast Asia, supporting millions of fixed-broadband, fixed-line, and cellular subscribers. Its strategic location on the Strait of Malacca, one of the world’s most important shipping lanes, enhances its commercial significance. Malaysia’s highly developed maritime shipping sector has earned it a top global ranking for shipping trade route connectivity.Resilience Amid Global ChallengesThe Malaysian economy has demonstrated remarkable resilience in the face of external challenges. In the fourth quarter of 2024, despite increasing global headwinds, Malaysia’s economy grew by 5.0 percent, driven by strong investment activities, rising exports, and sustained domestic spending. The central bank’s decision to maintain the policy rate at 3 percent reflects confidence in the country’s economic prospects, with inflation expected to remain manageable. Notably, the Malaysian ringgit appreciated by 2.7 percent in 2024, making it one of the few Asian currencies to strengthen during the year.A Forward-Looking EconomyLooking ahead, Malaysia’s growth is expected to be fuelled by robust investment expansion, resilient household spending, and a recovery in exports. The government’s Twelfth Malaysia Plan, which focuses on accelerating economic growth through selective investments and infrastructure development, is set to play a pivotal role in achieving these goals. Government-linked investment vehicles continue to invest in key sectors, further bolstering the economy.Stability and InclusivityMalaysia’s ability to manage inter-ethnic tensions pragmatically has also contributed to its economic stability. Despite occasional challenges, the country has maintained growth momentum, a testament to its inclusive development policies. The government’s focus on sustainable shared prosperity ensures that economic benefits are distributed equitably, fostering social cohesion and long-term stability.ConclusionIn conclusion, Malaysia’s strategic location, advanced infrastructure, diversified economy, and forward-thinking government policies have positioned it as a linchpin in Asia’s economic future. As the country continues to navigate global uncertainties while pursuing its vision of becoming a high-income nation, Malaysia is well on its way to becoming Asia’s most strategic economy.