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Figma Stock Drops After Google Updates ‘Vibe Design’ Tool

In 2025, the concept of vibe coding captivated the AI sector. Now, Google is set to introduce an innovative concept called “vibe designing.”

Google Labs announced the new term on Wednesday, unveiling significant updates to Stitch. This AI-driven tool allows users to generate “high-fidelity” user interface designs and front-end code through straightforward prompts.

This move represents another challenge to software developers as AI companies persist in developing features that compete directly with existing products.

Following Google’s revelation, the stock of Figma, a platform for interface and user experience design, dropped nearly 8% on that day, with a further 5% decline by Thursday afternoon in New York.


Google's Stitch design tool.

Google’s Stitch design tool.

Google


“When engaging in ‘vibe designing’ with Stitch, you can quickly explore various ideas, resulting in a higher quality outcome,” the company stated. “Rather than beginning with a wireframe, you can kick off the process by outlining your business objectives, the feelings you want to evoke in your users, or even drawing from current inspirations.”

Stitch has also added voice capabilities, enabling users to interact with the tool using their voice. “The agent can provide real-time design critiques, create a new landing page through an interview process, and make immediate updates—like ‘give me three different menu options’ or ‘display this screen in various color palettes’—as you speak,” Google announced.


Google's Stitch AI tool design templates

Some of the templates that Google’s Stitch AI tool offers.

Google


The tool also features templates for a variety of applications, including a “SaaS dashboard” and themes themed around health, entertainment, and utility, among others.

As advancements in AI continue to impact numerous industries, concerns have emerged about the potential for it to replace traditional software tools, leaving some engineers worried about job security.

However, AI industry leaders, like Nvidia CEO Jensen Huang, have challenged the idea of a looming “SaaSpocalypse.” He remarked, “It’s illogical to think that AI could entirely replace existing software companies. Time will reveal the truth.”

OpenAI CEO Sam Altman echoed this sentiment, suggesting that while the software industry is evolving, it is not vanishing. “The ways in which software is created and utilized will undoubtedly shift, affecting how much is generated for you versus how much you desire a consistent user experience,” Altman stated in a recent interview.

Figma CEO Dylan Field offered a more optimistic view during a February CNBC interview, indicating that industry volatility could ultimately strengthen companies over the long term.

In conclusion, Google’s introduction of “vibe designing” through Stitch underscores a significant leap in AI technology and its ability to shape the future of software development. As the tech landscape evolves, companies will need to adapt to this new paradigm and find ways to thrive amidst the changes.

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