Adobe acquires Topaz Labs, bringing on-device AI enhancement in-house

Adobe gains NeuroStream's on-device AI processing, reducing reliance on cloud infrastructure for heavy video enhancement workloads across upscaling, restoration, and stabilization. The acquisition extends Adobe's Firefly and Creative Cloud portfolio into the enhancement layer — the cleanup stage that any streaming or content production pipeline needs regardless of whether footage is captured or AI-generated. As creators increasingly blend traditional and generative content, quality control at the enhancement stage becomes the bottleneck. Watch whether Adobe integrates NeuroStream into Firefly Services' enterprise APIs, extending local AI processing to developer customers.

The Topaz acquisition comes two and a half years after Adobe abandoned its $20 billion acquisition of design platform Figma in December 2023, paying a $1 billion termination fee after the UK Competition and Markets Authority and the European Commission raised competition concerns (per Reuters, December 2023). That experience appears to have shaped Adobe's approach here: the company has stressed continuity rather than absorption, keeping Topaz products standalone and CEO Eric Yang in place. The Figma deal collapsed after 15 months of regulatory review with no path to approval.

Topaz Labs introduced NeuroStream in March 2026 as a proprietary VRAM optimization that reduces memory requirements by up to 95%, enabling large AI models to run on consumer-grade NVIDIA GeForce RTX GPUs rather than cloud servers (per PR Newswire, March 2026). A second iteration, NeuroStream 2, followed in May 2026 with up to 4x faster rendering for image models and a minimum 20% acceleration for video processing (per PR Newswire, May 2026). The technology was developed in collaboration with NVIDIA and supports consumer hardware configurations as modest as a 12GB RTX 4070 Ti.

The deal is Adobe's second acquisition of 2026, following the completion of its Semrush acquisition on April 28, 2026, which brought SEO and brand-visibility capabilities into Adobe's CX Enterprise platform (per Adobe News, April 2026). Adobe has also been accelerating its internal AI buildout: on June 18, 2026, the company launched new agentic capabilities in Firefly AI Assistant across Photoshop, Premiere, and other Creative Cloud apps (per Adobe Blog, June 2026). Firefly generative AI ARR surpassed $250 million by the end of fiscal Q4 2025, and AI-influenced ARR exceeded one-third of total bookings (per CMSWire, June 2026).

The competitive backdrop is intensifying. Canva launched its AI 2.0 platform in 2026 with a proprietary design model and agentic orchestration, directly challenging Adobe's hold on enterprise creative workflows (per Aragon Research, 2026). Meanwhile, OpenAI shut down its Sora video generation app after costs ballooned, underscoring the volatility of the generative video market and the relative stability of enhancement-focused tools like Topaz's (per The Next Web, June 2026).