Shop Till You Bot

What’s going on?

Klarna slimmed its losses in the first half of the year, and a certain famous chatbot might’ve had something to do with that.

What does this mean?

“Buy now, pay later” (BNPL) schemes let customers spread out their payments over time with interest-free credit. That’s a tidy idea when money’s good and those designer shoes aren’t technically in the budget. A potentially risky one, though, when the cost of living has emptied folks’ wallets and rate hikes have made interest-free debt a much bigger ask. But so far, even more shoppers are using Klarna to make nice-to-haves more manageable, and what’s more, inflation hasn’t stopped them from keeping up with their debts. Klarna’s real success, though, came from its shrewd cost-cutting and leaning into AI tools like ChatGPT to improve efficiency. That slimmed losses by two-thirds in the first half of this year versus the same time last year, and Klarna even wrangled a month of profit.

Why should I care?

For markets: Go U-S-A!

Klarna’s business was particularly blooming Stateside, now boasting around 30 million users and three straight quarters of gross profit. That’s just the ticket: Klarna has always said it wants an established US presence before it lists on the stock market. And while markets aren’t exactly shining right now, that means Klarna – once Europe’s most valuable startup – could hit the public stage in a few years.

Zooming out: You’re techy and you know it.

ChatGPT’s impact on Klarna shows just an iota of its potential in the business world. And OpenAI – the tech’s creator – knows it, launching a corporate version of the chatbot with new features and privacy settings designed to lure businesses in. That should hoist ChatGPT’s revenue even higher, adding to the already $1 billion annual sales it’s headed toward.

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Originally Posted August 31, 2023 – Shop Till You Bot