Latest AI News

Sweden's buy now, pay later giant Klarna initially embraced AI to cut costs, reducing customer service expenses by 40% and replacing 700 agents with OpenAI-powered chatbots. However, by 2025, declining customer satisfaction forced CEO Sebastian Siemiatkowski to admit they had overemphasized cost-cutting. While AI efficiently handled standard inquiries in multiple languages, it lacked the empathy needed for complex issues. Klarna has now reversed course, hiring human agents to complement AI capabilities. This experience highlights important lessons for the industry: AI can dramatically reduce operational costs but struggles with emotional intelligence, excessive automation risks customer trust, and a hybrid approach balancing technology with human touch may provide the optimal service model as Klarna prepares for potential public listing.

Replit secured $250 million in funding, reaching a $3 billion valuation. Led by Prysm Capital with participation from American Express, Google, and others, the AI coding platform has seen explosive growth with annualized revenue jumping to $150 million. Founded in 2016, Replit has formed strategic partnerships with Google Cloud and Microsoft Azure, positioning itself as a leader in the rapidly expanding AI-powered software development space.

Klarna, Europe's "AI poster child," is scaling back its aggressive chatbot strategy after initially replacing 1,000 employees with AI systems. While CEO Sebastian Siemiatkowski previously claimed AI could perform all jobs including his own, the company now acknowledges sacrificing customer experience quality. Their ChatGPT-powered system handled work equivalent to 700 human agents, with 96% of employees using AI daily. However, customer frustration with chatbots and declining satisfaction led to a strategy shift, with Klarna now rehiring staff to restore human interaction. This aligns with broader industry findings showing only 25% of AI projects meet expectations. Klarna's experience demonstrates that while AI offers efficiency, it cannot fully replace human empathy in customer service.

Amazon is developing "Jayhawk" AR glasses for consumers, competing directly with Meta in wearable technology. The glasses will feature microphones, speakers, a camera, and a color display in one eye, with a sleeker design than Amazon's delivery-driver version. Targeting a 2026-2027 launch, this move follows Meta's successful Ray-Ban partnership and represents Amazon's strategic pivot to consumer AR applications.