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Figma Sinks About 11% After Google Launches Free 'Stitch' AI Design Beta

Investors see risk from Stitch's Workspace integration plus 'vibe designing' that generates high-fidelity UIs from natural language.

Overview

  • Google Labs repositioned Stitch as an AI-native design canvas with 'vibe designing,' voice-driven controls, an agent manager, and developer exports including MCP integration and a DESIGN.md system.
  • Stitch is in public beta at no charge, and Google has not committed to availability or pricing timelines.
  • Figma shares fell roughly 8% Wednesday and more than 3% Thursday, a two-day slide reported at about 11% to 12%.
  • Stitch connects with Google Workspace apps such as Docs and Drive, raising concerns about pricing pressure and potential user migration from paid platforms.
  • Figma reported 2025 revenue of $1.06 billion up 41% year over year with net losses of $1.25 billion, citing 136% net dollar retention and projecting about 38% revenue growth in Q1.