Canva price hike highlights growing cost of Gen AI

Generative AI might one day cost designers their jobs, but in the meantime it’s costing them more money for subscriptions to Canva.

The design software company is hiking prices by as much as 300%, according to reports, and that price rise appears to be largely down to the inclusion of AI tools. Corporate subscribers to the multi-user “Canva Teams” package could see prices climbing from $120 to $500 (US dollars).

Customers shared screenshots of emails from Canva saying Teams plans would climb from $120 annually to a “discounted” $300 for a year, before settling at $500. The Team prices are dependent on the number of users. Monthly users showed Teams prices were increasing from $13 a month to $20 for two users, which was being described as a savings off the minimum price for new users of $30 a month.

What’s behind the price rise? Canva told The Verge the price bump is down to its “expanded product experience”, in particular slide and document editor Visual Worksuite and image editor and generator Magic Studio, both of which heavily feature generative AI. At the end of July, Canva bought generative AI company Leonardo.AI.

Naturally, people are annoyed. Some said they would cancel Canva and return to Adobe, while another said on X.com that Canva doesn’t seem to get “that we don’t want huge numbers of  new features — we just want it to work for price rises to be fair”. Another said: “AI doesn’t value add to what was already there.”

The growing cost of Gen AI

Prices are going up for software that embeds AI — whether users want it or not.

Microsoft Copilot Pro costs $20/month in the US, £19 in the UK and $33 in Australia. And GitHub Copilot costs US$19/month. But at least those are optional add-ons rather than a forced upgrade at increased cost. That’s what major software companies said should happen last year, with the Financial Times reporting that Adobe, Salesforce and Zoom had at the time each ruled out charging more for generative AI tools.

That said, Adobe did increase subscription prices at the end of last year by about 10%, though the company claimed that was for a wider tranche of new features beyond just generative AI.

Incumbent companies clearly feel the need to include generative AI tools to avoid startups drawing away customers with snazzy new features. But including AI in software comes at a high cost, be it through developing their own models, acquiring generative AI startups, or buying access from companies like OpenAI. Analyst firm Gartner said in July that “to a software company, GenAI most closely resembles a tax,” because any revenue gains are eaten up in costs paid to AI model providers.

That suggests that if Canva gets away with tripling prices and blaming it on AI, others may look to follow suit by increasing subscriptions to cover their costs of jumping on the generative bandwagon, regardless of whether or not users wanted those features. If the backlash against Canva is sufficiently harsh that it eventually backs down, that may reduce the impact on customers but make margins tighter for software developers.

One way or another, someone needs to cover the cost of automatically generating background images for social media posts.

Related:

• Adobe Express versus Canva
• Canva acquires Leonardo.Ai to supercharge AI toolbox
• Salesforce’s Einstein Copilot now available on Tableau
• What is Microsoft 365 Copilot? Guide by a Microsoft MVP