So here's a fun Thursday in the markets: Adobe Inc. (ADBE) shares gave back their earlier gains, and Figma Inc. (FIG) stock moved lower. Why? Because Alphabet Inc.'s (GOOGL) Google decided to drop a new toy called Nano Banana 2 into its Gemini app. It's not a snack; it's a new image-generation model. And investors in the creative software space are suddenly wondering if their lunch is about to get eaten.

Let's talk about what Google actually announced. In a series of posts on X, the Gemini team introduced Nano Banana 2. They're promising "Pro"-grade image quality at what they call "Flash" speed. We're talking realistic lighting, sharper textures, and—crucially for things like logos and posters—accurate multilingual text generation. The model is powered by real-time web search and image data, so it aims to keep up with current events. And here's the kicker: it's offered directly in the Gemini app and on the web. For free. No subscription, no credits, just free.

Now, why does this matter for Adobe? Adobe's entire business is built around its Creative Cloud franchise. That's the suite of tools—Photoshop, Illustrator, and now its Firefly-based generative AI—that it sells on subscription to creative professionals and marketers worldwide. A big part of its growth story lately has been upselling those AI credits and premium tiers within that ecosystem.

Enter Google with a free, high-quality alternative. The worry for Adobe investors is straightforward: if a creative pro or a marketing team can get "pro-grade" images for free from a platform as ubiquitous as Google, how much are they willing to pay Adobe for the privilege? This could pressure Adobe's ability to grow its Digital Media segment, which is its cash cow. It might also force Adobe to invest even more heavily in its own AI just to keep pace, squeezing margins. It's the classic innovator's dilemma, served up by a search giant.

But the story doesn't stop with Adobe. Let's look at Figma. Figma runs a browser-based collaboration suite for interface design, whiteboarding, and slides. It's used by product teams at big companies, and a key part of its appeal is its integrated, AI-enabled workflows. The thinking goes: if teams can now generate polished imagery, icons, and layouts for free in Gemini before they even open Figma, why would they do it inside Figma's paid environment?

This could shift attractive AI workflows outside of Figma's walls. To defend its competitive edge, Figma might be forced into steeper discounts or have to spend much more on developing its own proprietary AI models. Neither option is great for profitability.

So, how did the market react on Thursday? According to market data, Adobe shares closed the day up 0.48% at $259.04. That's a positive close, but the key detail is that it "gave back earlier gains." The stock was up more during the day before settling. Figma shares had a clearer negative reaction, closing down 3.27% at $30.22. The movement suggests investors are connecting the dots: a free, powerful AI image tool from Google is a new competitive headwind for companies that make you pay to create.

It's a reminder that in the AI gold rush, the companies selling the shovels (like software subscriptions) can still get rattled when someone starts giving away a pretty good shovel for free.