Initial public offering fever reached new heights with the Figma IPO, but beneath the trading frenzy lies a deeper story about how today’s tech stack — from design software to artificial intelligence infrastructure — is reshaping the rules of value creation.

While Figma Inc.’s Wall Street debut delivered a blockbuster moment, it also signaled a broader shift in how technology companies build momentum, raise capital and outmaneuver legacy giants. Behind the headlines, Silicon Valley’s old-school venture tactics are blending with a new wave of AI-fueled ambition. The result? A market where product-led growth, data leverage and platform consolidation collide in unpredictable ways. This moment isn’t just about a single stock — it’s a case study in the modern tech economy’s evolving playbook.

In this week’s episode of theCUBE Pod, John Furrier (pictured, left) and Dave Vellante (right) dig into the numbers, the nuance and the narratives behind the Figma IPO, from the venture capital windfalls to the future of large language models. They also examine the tension between short-term hype and long-term value, unpack Microsoft Corp.’s strategic accounting and assess whether the next big IPOs will follow suit — or flame out.

“It was a huge zoo inside the exchange. It was packed with Figma people,” Furrier said. “The mixed calculation on the economics for the demand put a lot of money in people’s pockets, the bankers, the VCs … that to me is the core story. Money making gone right, done right, venture built right … IPO certainly done right at the NYSE … great day, was very festive, carnival-like environment and this is the new stock market. It’s carnival time.”

Figma IPO returns spark debate on valuation, fairness and access

Figma’s IPO lit up the New York Stock Exchange in both optics and economics. Initially priced at $33, shares surged to $85 at open and closed above $110 on day one, peaking at $144 before stabilizing in the $120s. The buzz wasn’t just about Figma’s product — it was about the cash windfall for early investors, according to Vellante.

“The other backdrop here is that you remember Adobe tried to buy Figma and Figma agreed to the acquisition for $20 billion,” he said. “Adobe first tried to go after them in 2020 and then I think it was 2022; they agreed, but it wasn’t until 2023 in December where they terminated the deal … now, it’s worth nearly $60 billion.”

Greylock Partners LLC, Kleiner Perkins, Index Ventures and even latecomer Sequoia all saw substantial fund returns — some exceeding 17x. But not everyone was cheering. Investor Bill Gurley argued that the bankers drastically underpriced the deal, enabling insiders to reap disproportionate gains while retail investors bought in after the jump, Furrier commented.

“It’s your expression, the two-armed lawyer,” he added. “On one hand you got this, on the other hand you got that. You can slice it from both sides. To me … they got to bump up instantly because the bankers have set the price for the spread. They probably knew the demand.”

Questions rise around LLM sustainability and enterprise AI adoption

Beyond the Figma IPO fervor, Furrier and Vellnate talked about the economics and future of LLMs. As training costs balloon — from $35 million for GPT-3 to projected billions for GPT-6 and beyond — the sustainability of the LLM race is under scrutiny. They questioned whether current models can keep up with demand without hitting functional or financial walls, Furrier explained.

“I think you’ll see enterprise adoption stay within the RAG use case, retrieval augmentation generation and other productivity, low-hanging fruit,” he said. “Stuff that’s going to get into production, that’s going to drive the real productivity is great. “I think the AI game is going to still be a simmer before it gets hot. I think it’s still hyped up with agents, but data, the data layer, some of these tools, some of the models, they just got to be baked out a little bit further. I think that’s going to be just evolution.”

Enterprises, meanwhile, remain cautious. Despite the hype, AI adoption at scale is lagging. Boards are curious, pilots are active but transformative ROI hasn’t landed. RAG is popular, but it’s not moving the needle yet, Vellante explained.

“All the action is in this CapEx,” he said. “There’s still a lot of experimentation … RAG-based chat bots, they’re nice, but really not moving the needle.”

Cloud growth sleight-of-hand and an IPO market on edge

In other news, Microsoft’s Azure growth numbers are raising eyebrows — and for good reason. The company quietly redefined what counts as Azure revenue, pulling out low-growth segments and adding booming AI inference workloads from OpenAI Inc. The result? A headline growth rate that looks stellar, even if the underlying story is more nuanced, Vellante pointed out.

“What Microsoft did last fall, they recast their definition of Azure,” he said. “Their growth rates looked great. Wow, look at how fast Azure’s growing. They just changed the definition of Azure.”

Beyond Microsoft, the broader tech market is heating up fast. Investors are throwing money at pre-IPO companies such as Canva Pty Ltd., hoping for another Figma IPO-style breakout. But some warn of a bubble redux, with frothy valuations and a risk of repeat Netscape Communications Corp. moments if these firms can’t deliver post-pop performance.

“You don’t want to be the darling and then fall off favor by not executing,” Furrier said. “Figma did get a nice pop, but to me, the story here is, it’s over now. It’s like celebrating when you win the conference championship and now it’s the Super Bowl time. You got to go back to the game and start all over again.”

Watch the full podcast below to find out why these industry pros were mentioned:

John Lilly, board member at Figma
Mamoon Hamid, partner at Kleiner Perkins
Bill Gurley, general partner at Benchmark
Frank Slootman, former chairman and CEO of Snowflake
Andrew Ross Sorkin, American journalist and author
Elon Musk, chief executive officer of Tesla
Jamie Dimon, chairman and CEO of JPMorgan Chase
Sam Altman, co-founder and CEO of OpenAI
George Gilbert, principal analyst at theCUBE Research
Andy Jassy, president and CEO at Amazon
Tom Lahive, VP of alliances at CyberArk
Matt Yanchyshyn, VP of AWS Marketplace and partner services at AWS

Here’s the full episode of this week’s theCUBE Pod:

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Photo: SiliconANGLE