Taste Is the Last Moat
Why I'm Buying Figma
The market was wrong, LLMs won't replace designers.
I like Stanley Druckenmiller’s tendency to approach stocks with a “buy now, research later” instinct. Sometimes you just get this feeling where everything clicks about a stock, mainly that the market is not seeing something. After seeing Figmas new product demo and realizing that AI sucks as design it just clicked for me.
In this case, the market has rewarded all of the hyperscalers and then moved on to all of the compute and infrastructure companies—Dells, HPs, Microns, Sandisks of the world. These market moves made total sense, grounded in real structural demand driven by AI, though maybe they over-indexed a touch.
We’re now at a point though where the SaaS apocalypse narrative (the idea that frontier model companies were going to replace every SaaS company) is becoming pretty obviously wrong. I think it’s been obvious to some people who are deep in the space, but the Wall Street analyst crowd, who are really just observers of this technology, are starting to experience that reality themselves. And I think the narrative is going to change.
There’s been this open debate among AI experts (of which I am definitely not one), but as an observer of the conversation you could see a bifurcation between two groups. On one hand, you had people like Dario Amodei saying that within a year all jobs were going to be gone. On the other hand, various AI researchers and experts were saying we’re at least ten years away. I think we’ve hit an inflection point where the latter camp is undoubtedly winning the argument.
Just from personal experience using AI every single day, I can say that for coding there’s no doubt it is the most productive, addictive, and useful thing ever created. It dramatically lowers the barrier to entry and allows creatives to turn ideas into software.
On the design side, though, I have a completely different opinion. I think most people would agree that AI is great for prototyping designs, but not much more than that. In the same way that Claude Code has become an essential tool for developers, I think the equivalent for designers is going to be Figma. There will be other apps, but Figma is by far the leader in this category.
The stock has underperformed since the IPO for different reasons, but I think once the narrative around AI replacing designers took off, it took an even bigger hit.
As a Figma user, I had my doubts about its future too because their AI tools felt lackluster. Then last week, at their conference, they released a lot of really impressive products that organically weave AI into the product. The sentiment among designers about the new products seems to be overwhelmingly positive.
Figma is becoming a control plane for design—a shared canvas where AI has all the context it needs to orchestrate creative workflows. It’s the perfect canvas, or substrate, for AI to sit on top of because it provides all of the context and tooling AI needs to create really great design.
Will AI replace designers? I don’t think so.
Will designers use AI on top of a powerful canvas like Figma to create far more than they could before? Absolutely.
I think AI-augmented design tools are the future, not AI replacing designers.
The one thing AI cannot do is intrinsically have taste. No matter how you prompt it, there’s something fundamental about creativity and design that has to come from a human. Design is an ephemeral thing. It comes from the creativity of one person and resonates with many people. Eventually it becomes popularized and copied, and at that point it becomes old. Then someone creates the next thing.
All of that is to say that I think the question of whether AI can have taste has a pretty clear answer: no.
That’s how I think this plays out. Humans remain the creative drivers for the foreseeable future, and Figma becomes the platform they use to amplify that creativity—not replace it.
As far as the stock goes, I think it has bottomed here. It’s trading at a reasonable valuation. The company is intentionally sacrificing some near-term profitability to invest aggressively in AI, something management has been very explicit about.
I expect revenue to continue growing. Profitability will come over time, and when the market starts realizing that, the stock price will likely move before the financials fully reflect it. Markets are reflexive like that.
By the time Wall Street turns bullish, it’ll probably be too late.