Canva launches image generation model to cut costs and expand AI design tools

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Canva launches AI image tool

Highlights

Canva launched its proprietary Canva Craft image generation model, available to all users via Dream Lab and soon through API, targeting enhanced design versatility.
Developing Canva Craft in-house reduces reliance on external providers, cutting API costs and offering better control over output quality and speed.
Canva, with 2023 revenue projected at $4 billion, saw its valuation drop from $42 billion to $35 billion after lowering the 2026 growth forecast.

Model rollout and product integration

As reported by TechCrunch, Canva has released Canva Craft, an image generation model built by its research team and now available to all users through the Dream Lab tab.

The model works in two stages, with the first interpreting a user prompt and creating a plan covering spatial relationships, scale, visual hierarchy and text-generation information. In the second stage, it produces an image of up to 2K resolution in as many as 30 aspect ratios for use across different platforms.

Canva says the approach is designed to improve object detail and make text more legible, while also allowing users to make precise edits without altering other parts of an image. The company adds that Canva Craft was trained on human-designed templates from its own library, including posters, social posts, presentations, infographics, menus and typography-heavy layouts, rather than on photographs.

That training method means generated images can be turned into layered designs through Canva Magic, the company’s image-to-design transformer. Canva also says the model will be available through its API and is planned for use in third-party chatbots such as ChatGPT and Gemini through Canva’s MCP.

Cost strategy and growth backdrop

Building its own model could help Canva reduce reliance on external image generation providers that it has used on its platform, potentially lowering API expenses. The company says the new system also gives it better control over output quality and speed, alongside the cost benefits.

Canva says researchers from Leonardo.ai, the media generation platform it acquired in 2024, contributed to the new model. It is also developing two lower-cost variants, Craftfast and Craft-ultrafast, which it plans to release soon.

The launch comes as Canva continues to scale its AI offerings while facing closer scrutiny of its growth outlook. The company was on track for $4 billion in revenue last year, but external analysts said its valuation reportedly fell from $42 billion to $35 billion after it cut its 2026 growth forecast.

In our earlier article on the KPMG U.S. CEO survey about AI agents, we noted that many large companies are already seeing efficiency and growth gains, even though only a small share currently view the technology as truly transformational. The survey also highlighted that executives expect continued hiring, retraining, and sizable investment in AI infrastructure as businesses work through the harder task of redesigning processes around AI tools.

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