Canva faces valuation markdown due to rising AI costs

Canva, Australia’s most valuable private company, is facing significant economic challenges due to the integration of artificial intelligence. The company recently saw its valuation decrease by $10 billion, a shift largely attributed to the rising costs associated with AI.

Co-founder Cliff Obrecht noted that while the cost to serve users was historically negligible, the computational requirements of AI have increased the cost of goods per user from cents to many more cents. This shift disrupts the traditional software model where marginal costs for new customers are minimal.

With 265 million users and $US1.5 billion in capital, the company’s ability to manage these new AI-driven expenses is viewed as a critical test for the Australian technology sector and its ability to scale high-growth software firms.