Figma's AI Data Practices and Their Implications for SaaS Valuation Models: Assessing Legal and Reputational Risks in AI-Driven Platforms

In 2025, Figma has emerged as a pivotal player in the AI-driven design and development ecosystem, leveraging generative tools to streamline workflows for millions of users. However, its rapid expansion into AI has sparked a contentious legal and reputational crisis, raising critical questions about the valuation of SaaS platforms that rely on user data to train AI models. As the industry grapples with balancing innovation and compliance, Figma's case offers a stark illustration of how legal and reputational risks can reshape SaaS valuation dynamics.

Figma's AI Expansion and Market Position

Figma's aggressive foray into AI has positioned it as a leader in the design-to-code workflow, particularly in India, where 93% of designers now integrate AI tools into their processes, according to a survey conducted in partnership with YouGov. The company's 2025 acquisitions, including Weavy-a generative AI platform for image and video generation-underscore its commitment to embedding AI across its product suite, from Figma Design to Dev Mode according to the same report. This expansion aligns with broader industry trends, where SaaS providers increasingly rely on AI to automate tasks and enhance user productivity.

Yet, Figma's AI ambitions have collided with legal scrutiny. A proposed class-action lawsuit filed in the U.S. District Court for the Northern District of California on November 21, 2025, alleges that the company improperly used customer design data-including files, layer properties, and text-to train its AI models without explicit consent. The plaintiffs claim this practice violates intellectual property rights and misrepresents Figma's data usage policies as stated in a Law360 article. While Figma denies the allegations, stating it trains models on "general patterns" and removes identifying details according to the same source, the lawsuit highlights a growing tension between AI innovation and data governance.

Legal and Reputational Risks in AI-Driven SaaS

The Figma case exemplifies the dual-edged nature of AI in SaaS. Legal risks arise from ambiguities in data ownership and consent, particularly when user-generated content is repurposed for model training. As noted in a Harvard Corporate Governance analysis, 38% of S&P 500 companies disclosed AI-related reputational risks in 2025, with concerns over biased outcomes, unsafe outputs, and brand misuse. For Figma, the lawsuit could amplify these risks, eroding user trust and investor confidence at a time when transparency is paramount.

Reputational damage is compounded by the public's heightened sensitivity to data misuse. A report by Protecto.ai emphasizes that SaaS providers must now embed compliance into AI workflows to meet evolving regulations like the EU AI Act and GDPR. Failure to do so not only invites litigation but also deters enterprise clients wary of regulatory non-compliance. Figma's legal battle, therefore, is not an isolated incident but a harbinger of broader challenges for SaaS platforms that prioritize AI-driven growth over robust governance.

Valuation Implications for SaaS Platforms

The financial repercussions of AI-related risks are increasingly reflected in SaaS valuation models. Traditional metrics such as revenue growth and customer acquisition are now tempered by assessments of compliance costs, reputational resilience, and regulatory alignment. For instance, the EU AI Act's risk-based obligations-requiring continuous documentation and transparency-impose operational burdens that directly affect a company's cost structure. Similarly, U.S. state laws like California's privacy regulations create a fragmented compliance landscape, increasing legal exposure for SaaS firms operating across jurisdictions according to the same report.

In the financial sector, case studies demonstrate how explainable AI frameworks (e.g., SHAP values, LIME) enhance trust and compliance, thereby supporting higher valuations. Conversely, missteps in AI deployment-such as biased outputs or data breaches-can trigger significant valuation declines. Figma's lawsuit, if unresolved, could deter institutional investors who prioritize ESG (Environmental, Social, and Governance) criteria, further pressuring its stock price.

Conclusion: Balancing Innovation and Risk

Figma's AI journey underscores a critical lesson for SaaS providers: innovation must be paired with transparent governance. While AI offers transformative potential, its integration into SaaS platforms demands rigorous adherence to data privacy laws, user consent protocols, and ethical AI principles. For investors, the valuation of AI-driven SaaS companies now hinges on their ability to navigate these risks without stifling innovation.

As the legal and regulatory landscape evolves, Figma's case serves as a cautionary tale. The company's response to the lawsuit-whether through litigation, policy revisions, or enhanced transparency-will likely set a precedent for how SaaS firms address AI-related risks in an era where trust is as valuable as technology.