Atlassian and Figma are outspending most of the software industry on research and development, according to The Information. The two companies sit at the top of R&D-to-revenue ratios among major software players, signaling an aggressive bet that building faster will be the defining competitive advantage in the AI era.
This matters more than it might seem on the surface.
Why R&D Intensity Is the New Scoreboard
Software companies have always spent heavily on engineering. But the current AI wave has turned R&D from a line item into a survival strategy. Every major product category, from project management to design tools, is being reshaped by AI features. Companies that can’t ship AI-native capabilities fast enough risk losing users to competitors who can.
Atlassian has been weaving AI across Jira, Confluence, and its entire collaboration suite. Figma, fresh off its failed Adobe acquisition and subsequent IPO path, has been pouring resources into AI-powered design features like its generative UI tools. Both companies clearly believe that the next 18-24 months will determine who owns their respective categories long-term.
What This Signals for the Broader Market
When companies with strong market positions increase R&D spending this aggressively, it tells us a few things:
- AI integration isn’t optional. Every horizontal SaaS company is in a race to embed AI deeply into workflows before a startup does it from scratch.
- The build-vs-buy calculus is shifting. High R&D spend suggests these companies are building proprietary AI capabilities rather than just wrapping third-party APIs.
- Margins will compress before they expand. Investors should expect near-term margin pressure as R&D budgets swell, with the payoff coming later through retention and pricing power.
This pattern isn’t unique to Atlassian and Figma. Across SaaS, companies like ServiceNow, Datadog, and Canva have all ramped engineering investment. But Atlassian and Figma stand out for the sheer percentage of revenue they’re funneling back into product development.
What AI Practitioners Should Watch
For teams building on or competing with these platforms, the practical takeaways are clear:
- Platform lock-in is deepening. As Atlassian and Figma ship more AI-native features, switching costs go up. If you’re evaluating tools, the AI roadmap matters as much as today’s feature set.
- Talent competition intensifies. Heavy R&D spend means aggressive hiring for AI/ML engineers, which tightens the market for everyone.
- Startups need sharper wedges. Competing head-to-head with companies spending this much on R&D is brutal. The opportunity is in workflows these giants haven’t prioritized yet.
Looking Ahead
The R&D arms race reported by The Information isn’t slowing down. If anything, it’s accelerating as AI models get more capable and the cost of NOT integrating them becomes existential for software companies. Atlassian and Figma are placing big bets that outbuilding the competition is the path to long-term dominance. The next few quarters will show whether that spending translates into features users actually adopt, or whether it’s just an expensive insurance policy.
Full details on the R&D spending breakdown are available in the original report from The Information.