Adobe proves AI is more than hype

☕ Good morning,

It's almost refreshing to see Adobe make money the old-fashioned way: by creating tools people actually want to pay for, rather than burning investor cash on hype cycles and hoping something sticks.

_{—Here’s to the first sip.}

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TODAY IN AI
Adobe’s AI bet is paying off

Adobe’s latest numbers show one thing, AI is starting to pull real weight. For the next quarter, they’re expecting just over $6 billion in revenue, slightly above expectations, and profits are landing higher than Wall Street predicted.

Adobe says its AI features across tools like Photoshop have already pushed annual recurring revenue past $5 billion. That’s a strong signal the company’s bet on building its own generative AI models is working, even as Canva and Midjourney try to eat into its space.

Last quarter, Adobe pulled in $5.99 billion, up 11%, with profits also beating estimates. The core creative and document software business grew 12% to $4.46 billion, with recurring revenue hitting $18.6 billion.

Investors reacted fast, Adobe stock jumped 4% after hours. It’s still down this year, but this quarter proves the company isn’t just riding AI hype. It’s making money from it.

 FAST BARISTA

● xAI has cut 500 jobs, about one-third of its data team that trains the Grok chatbot. The company says it’s shifting away from general AI tutors to focus on specialist tutors. Laid-off staff were told their jobs ended immediately as part of the pivot. At the same time, xAI plans to hire many more experts in areas like science, finance, and medicine. The goal is to build a stronger team to improve Grok with deeper subject knowledge.

● OpenAI has launched “OpenAI Grove,” a new program for founders at the pre-idea to pre-seed stage. The 5-week program offers mentoring, early access to tools, and workshops at OpenAI’s San Francisco HQ. About 15 entrepreneurs will join the first cohort running Oct. 20–Nov. 21, with applications due Sept. 24. Grove members can keep working with OpenAI after the program ends. The move comes as AI startups dominate funding, raising $104B in the U.S. in early 2025.

TECH BARISTA
Microsoft drops Teams from Office to avoid EU fine

Microsoft just sidestepped a big EU fine by finally agreeing to separate Teams from Office. Slack has been pushing for this since 2020, saying Microsoft was unfairly bundling its video chat tool to crush rivals.

Now, Microsoft will sell Office with and without Teams, with a clear price gap of €1–8. That setup will stay in place for seven years. On top of that, it’s opening things up so businesses can export Teams data to competitors and making sure other apps can play nicer with its services for at least a decade.

For companies, this means real choice. If you like Teams, fine. If not, you don’t have to pay extra for it and can switch to Slack, Zoom, or anything else. Rivals like Slack and Alfaview are calling it a win, and it shows the EU’s approach of “fix the problem without years of lawsuits” is working.

MORE TO KNOW

● Penske Media, owner of Rolling Stone and Billboard, has sued Google over its AI Overviews feature. The lawsuit claims Google uses its journalism without consent, cutting traffic and ad revenue. Penske says 20% of Google searches linking to its sites now show AI summaries, hurting income. Google argues AI Overviews improve search and boost discovery, calling the claims meritless. The case is the first major U.S. publisher lawsuit against Google’s AI-driven search results.

● Apple is losing Robby Walker, one of its top AI executives and former Siri head, next month. Walker shifted from Siri to leading Apple’s AI-powered search project set to launch in 2026. His exit follows delays in Siri upgrades and shrinking responsibilities in recent months. Apple’s AI team has seen multiple high-level departures to rivals like Meta. The company’s stock is down nearly 7% this year as AI struggles weigh on investor confidence.

GADGETS BARISTA
Moto Pad 60 Neo launches in India

Motorola just dropped the Moto Pad 60 Neo in India, and it’s clearly aiming at the budget crowd. You’re getting an 11-inch 2.5K LCD with 90Hz refresh, Dimensity 6300 chip, 8GB RAM, and 128GB storage you can expand. Cameras are basic 8MP rear, 5MP front, but the real value is in the extras: quad speakers with Dolby Atmos, a bundled stylus, 3.5mm jack, and full 5G support.

Battery is solid at 7,040 mAh with 20W charging, though Motorola is tossing in a 68W charger just to sweeten the deal. The tablet is slim at 6.99mm, weighs under 500g, and has splash resistance.

Price is ₹17,999, but with launch offers you can snag it for ₹12,999 starting September 22 on Flipkart and Motorola’s site. Not bad for what’s basically a student-and-entertainment tablet with a few premium touches.

FAST FLASH

● Samsung is skipping the Tab A10 and launching the Galaxy Tab A11 series instead. The Tab A11 has an 8.7" 90Hz LCD, upgraded 5MP selfie cam, Helio G99 chip, and up to 128GB storage. It also keeps a microSD slot, headphone jack, Dolby Atmos speakers, and packs a 5,100mAh battery. The Tab A11+ will be larger at 11", powered by a Dimensity 7300 with 5G support and bigger storage. Both tablets should launch soon, priced under €200 for the base A11 in Gray and Silver.

● Apple has opened iPhone 17 pre-orders across 63 countries, with deliveries set for Sept 19. The iPhone 17 Pro Max is in such high demand in the U.S. that shipping now slips to early October. All storage and color options face the same 3–4 week delay, with limited in-store pickups possible. Prices start with 256GB models across the lineup, though the iPhone 17 Air is delayed in China. Carriers and retailers may still have stock even as Apple’s online store sells out fast.

STARTUP BAR
Micro1 raises $35M for AI training data

AI models don’t train themselves. Behind the scenes, armies of people label and structure data so these systems can actually learn. That’s where Micro1 comes in. The startup is only three years old, but it’s already raised $35 million at a $500 million valuation and says it’s pulling in $50 million a year.

The founder, Ali Ansari says Micro1 is working with Microsoft and Fortune 100 companies. Instead of cheap mass labor, it recruits domain experts: engineers, doctors, professors. They’re vetted by an in-house AI recruiter called “Zara.” The bet is simple: higher-quality human input means better AI models.

And Micro1 isn’t stopping at labeling. AI labs now want “environments” simulated workspaces where AI agents can practice real-world tasks. Micro1 is already building for that shift.

So yeah, it’s not as big as Scale AI or Surge yet, but the market is wide open. With multiple labs using multiple providers, Micro1 doesn’t have to win it all it just has to stay fast and essential.