Klarna Shifts AI Strategy From Cost-Cutting to Growth After U.S. IPO

Swedish fintech Klarna is recalibrating its use of artificial intelligence, shifting from aggressive cost-cutting to enhancing customer services and long-term growth. CEO Sebastian Siemiatkowski told Reuters that while AI had helped streamline operations, the company “probably over indexed” on savings and is now focused on improving its products and merchant offerings.

The comments came as Klarna debuted on the New York Stock Exchange on Wednesday. Its shares opened at $52, a 30% jump above the $40 IPO price, giving the buy-now, pay-later lender a market capitalization of $19.7 billion. The IPO raised $1.37 billion, valuing Klarna at around $15 billion and marking the largest U.S. market debut by a Swedish firm since Spotify.

Klarna has leaned heavily on AI in recent years, cutting staff from 5,000 to 3,800 and using chatbots to replace 700 customer service roles. The company said AI had slashed customer query resolution times from 11 minutes to just 2 minutes. It also experimented with an AI avatar of Siemiatkowski for earnings presentations and even launched a hotline where customers could speak to an interactive version of the CEO.

However, the company has since realized that cost savings alone—like the $2 million saved by replacing Salesforce with in-house AI data tools—carry little weight with investors. Instead, Klarna is refocusing on growth, customer satisfaction, and productivity. Siemiatkowski emphasized that investors “are going to look for growth, and they’re going to look to what we offer our customers and how that’s doing.”

The company, now hiring again with more than two dozen job openings, sees AI as a tool for scaling services rather than just trimming expenses. CFO Niclas Neglen stressed that AI’s role “is definitely not just a cost play… it’s going to help us provide better services to consumers and merchants over time.”

Siemiatkowski, who holds about 7% of Klarna, did not sell shares in the IPO. Reflecting on the milestone, he compared it to a wedding: “It’s a big party and then life goes on, and you get kids and other things happen.”