Adobe (NASDAQ: ADBE) shares dropped 1.7% on Tuesday after Google announced major enhancements to its Gemini app’s image editing tools, raising concerns about Adobe’s dominance in the digital imaging market.
Google introduced what it called “the world’s top-rated image editing model” for Gemini, adding advanced features that let users preserve subject likeness across edits. New tools now allow users to insert themselves or pets into different scenes, merge multiple photos, apply design styles from one image to another, and perform multi-step editing with greater precision.
These upgrades put Gemini in more direct competition with Adobe’s flagship products like Photoshop, which has long been the standard for professional image editing. Unlike Adobe’s subscription-based model, Google’s free offering may attract casual users, increasing the competitive threat.
Google also confirmed that all images edited in Gemini will carry visible watermarks and invisible SynthID digital watermarks to ensure clear labeling as AI-generated content.
The market reaction highlights investor concerns that Adobe could face stronger headwinds from AI-driven rivals. As AI adoption accelerates, Adobe’s creative software business may be increasingly challenged by free and innovative alternatives.
