There have been many headlines over the years, with recent ones talking about saving septillion years using quantum computing and mapping a fruit fly’s brain that previously would have taken thousands of years using AI. No wonder businesses are keen on AI.
So it’s weird that, according to Microsoft, half of UK businesses have no idea what to do with AI! Their research, which is based on surveys with 1,480 UK senior leaders across public and private sectors, as well as 1,440 UK employees, found that more than half (54%) of leaders report that their organisation still lacks any formal AI strategy.
So then I was thinking which company had been talking most about how AI is saving them, and the company name that came to mind is Klarna. When ChatGPT launched in November 2022, Klarna Co-founder and CEO Sebastian Siemiatkowski immediately saw the potential and became the first fintech firm globally to launch a ChatGPT plugin which, they claim, does the job of 700 full-time agents automatically.
“We push everyone to test, test, test and explore. As Klarna continues to discover applications for OpenAI’s tech, there’s the potential to take the business to new heights. We’re aimed at achieving a new level of employee empowerment, enhancing both our team’s performance and the customer experience.” Sebastian Siemiatkowski, Klarna Co-founder and CEO
As a result, Klarna claims that it cut its workforce from 5,000 to 3,800 in the 2024, and wants to reduce that to 2,000 employees by using AI in marketing and customer service.
Fantastiche!
This is all good as Klarna is approaching an IPO with a valuation of over $15 billion, although their valuation has swung wildly. By way of example, Klarna drew investor attention as its valuation soared from $5.5 billion to $46.5 billion in just two years, fueled by three funding rounds between mid-2020 and 2021.
Anyways Klarna, more than almost any other company, has talked loudly about how AI has saved it money.
Yet Martin Peers writing on The Information notes that the savings outlined in its IPO filing seem pitifully small. For instance, the filing said that an AI assistant that did the equivalent work of hundreds of full time human staffers “delivered $39 million of cost savings in 2024.” AI helped Klarna save $2.6 million on marketing suppliers in the first quarter of last year. “AI-powered marketing” saved another $2.5 million in the first quarter of 2024. An AI tool that automated a critical and time consuming task on the engineering side saved $4.8 million last year.
That’s great isn’t it! You’re talking of savings of more that $50 million a year … but then, according to the IPO filing, that’s not much for a company whose total expenses last year were $2.9 billion.
The point is that we are still in very early days with AI and other future technologies like quantum. Probably, in another decade or two, it will all be working wonderfully but when, today, my AI bot draws a butterfly like this …
… I know we have a long way to go.
