In today’s issue:
- Klarna’s AI-driven profits
- Apple’s glow party – and the tiny tech behind it
- Lettuce people
Editor’s note: Today, we bring you a guest piece by Sam Volkering from his publication AI Collision which was first published on Tuesday 3 September.
You can hear from Sam more often at AI Collision and learn more about the latest developments in AI by simply clicking here to sign up for free.
Welcome to AI Collision 💥,
Before I dive into today’s regular AI Collision sections, I just want to tell you something…
I think this is the biggest investment opportunity of the decade.
It’s not all rainbows and frolics in the fields though. To unlock this immense investment opportunity, fact of the matter is, someone’s job is about to go! I’ve written a bit about this in the last couple of weeks, but now I have a full feature presentation available to you – about an opportunity in the AI space that I don’t want you to miss. Nobody’s talking about it because frankly, it terrifies too many people.
But we’re not here to string you along. We’ll tell you upfront that some bad stuff is coming, but it will unlock even better, more exciting and fruitful times for adventurous investors.
Check out the details and proof for yourself right here.
Now back to our regular programming…
Last week I wrote about Salesforce dropping its latest iteration of its AI agents into the wild. I quite literally lead that essay with the header, “AI agents are here to steal your job.”
That wasn’t hyperbole. And today is proof of that.
Think again about what an AI agent is for. Its aim is to help organisations be more productive, and of course to streamline operations. In short, AI reduces headcount and enables higher profitability.
But this isn’t just about a chatbot as a customer service agent on a website. This is about real-time data analysis and interpretation to make decisions on the fly, to assist customers, yes, but also to generate sales, and revenues for the company.
Again, all good in theory, so what about a real-world example of how AI is already shifting the needle on company profits?
The next day after we pushed out our edition of AI Collision💥 the buy-now-pay-later European giant Klarna released earnings and some eyebrow-raising comments on its use of AI.
First off, Klarna’s quarter saw the company generate a $66 million profit. That is in stark contrast to the same quarter a year prior when it notched up a $44 million loss.
Typically, that kind of profit bump would send a stock price soaring… except Klarna is still private. The expectation is it’s going to IPO in 2025 – which is hotly anticipated – with a rough valuation of around $20 billion.
That’s all good and well, and if it gets to IPO phase, we’ll take a bit of a closer look at it.
But what was really interesting about the result was the commentary around its implementation of AI into the company.
Source: Klarna
Klarna has been reducing headcount. It says by natural attrition, but also because it’s simply stopped hiring anyone that isn’t an engineer.
After having around 5,000 staff a year prior, it’s now down to about 3,800.
Expectations is that could get down to 2,000.
That means paying who they have better, and also strangely enough, Klarna is now increasing its revenues per employee. As it explained:
Average revenue per employee over the past 12 months had increased by 73%, rising from 4 million crowns to 7 million.
This in part is also due to the implementation of AI into its organisation. According to a report on Yahoo Finance:
[AI] now performs the work of 700 employees, Chief Executive Officer Sebastian Siemiatkowski said in a statement announcing the results.
This also comes off the back of Klarna outlining earlier this year that 90% of its workforce uses generative AI in some capacity on a daily basis, and that using AI in marketing has helped the company with a 37% reduction in costs, around $30 million per year.
So, to recap, here’s a profitable company that’s implemented AI to reduce costs, enabling it to reduce headcount, provide better pay for its existing workers, and this is all leading towards a 2025 IPO…
That’s a pretty good real-world example right now of what progressive companies are doing with AI, which isn’t a mega-tech company like Nvidia, Microsoft, Apple or Meta.
This is how AI finds itself in our day-to-day lives. And the next time you see Klarna’s little logo on the e-commerce checkout, you’ll know behind that button is a lot of AI.
AI gone wild 🤪
This doesn’t even look real.
It’s hard to explain, other than when you click the image below, you’ll head to a Reddit page with a video. That video is a microscope zooming in on what’s said to be an iPhone central processing unit (CPU) and it’s what’s often referred to as its silicon.
So, when you hear the phrase “Apple silicon” this is what it’s referring to. And with Apple about to hold a new “event” in a few days’ time, which could very well be about AI and generative AI in its iPhones, the video your about to see is even more important and wild.
To put some context in before you see what’s coming below, when you hear about Apple Intelligence, Apple’s AI, whatever this Glow Party is all about – basically anything to do with Apple and AI – I also want you to think about this video below, because “Intelligence” does not exist without this incredible piece of human invention.
Check out the video and it pretty much explains itself.
Source: Zooming into iPhone CPU silicon die via Reddit
Having seen that, what are your thoughts?
Wild right?
We often talk about it, but rarely see just how incredible human invention, innovation and ingenuity is.
To be able to have come up with the design, the machines to create and the end product itself is akin to a modern miracle.
It’s why companies like ASML (who I wrote about a few weeks prior when we still published through Substack) are worth so much and why their machinery costs millions of dollars.
It’s also why companies like ARM Holdings have such huge potential in their locker – because without them, without their capacity to design these unbelievable modern miracles, the world we know of today simply wouldn’t exist.
And from my view, I think it’s companies like these, the ones that create these genius bits of tech at the nanometre level, that are the most valuable and important companies in the world today, and for the next 50 years.
Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week.) [Figures correct at time of writing.]
Boom 📈
- Gorilla Technology (NASDAQ:GRRR) up 28%
- Aerovironment (NASDAQ:AVAV) up 10%
- Vertiv (NASDAQ:VRT) up 7%
Bust 📉
- Brainchip Holdings (ASX:BRN) down 20%
- Cyngn (NASDAQ:CYN) down 10%
- Veritone (NASDAQ:VERI) down 12%
From the hive mind 🧠
- I will dive deeper into this in another edition. But for now, if you want to know how to make a record about of money and still see your stock tank, here’s an example from the world’s most famous AI company.
- My take is that we’re in a stage of enterprise adoption of AI like the early days of cloud computing. I remember when companies would ask, “Why should I be ‘in the cloud’?” and refused to entertain its importance. Now, they’re all in the cloud. ALL OF THEM. I think we’ll see the same kind of thing with AI. But for now, there is a clear adoption trend underway.
- If you’re a fan of 90s PC gaming, well this is for you. It is just very, very cool to think AI can do this now.
Artificial Polltelligence 🗳️
Now we’re looking back at our poll from a week ago: What do you think is a more likely job in the next five years thanks to the speed of AI progress?
Of the options provided, the clear winner was “AI Police”.
But the poll results are somewhat moot, because the better responses came from your comments. Such as:
- Air Traffic Control, a role just made for AI involvement
- Distribution systems analysis
- Fiction writer
- AI OBR (Office for Budget Responsibility)
- AI social credit score compliance agents
- And a comprehensive list of, ATS, lawyers, bankers, haulage, freight, taxi, pilots, train drivers, civil servants, GPs
Wonderful responses! Keep ‘em coming.
The results from the Oasis poll… well, we don’t need to dive into those, we’ll just keep walkin’ on byyyyyyy.
Weirdest AI image of the day
ChatGPT’s random quote of the day
“The Internet is the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.” – Eric Schmidt, 1999
Thanks for reading, see you next time!
Sam Volkering
Editor-in-Chief, AI Collision
PS Don’t forget to check out Sam’s latest presentation. If you’re interested in AI and investing in the space, it’s well worth a peak.
And if you enjoyed this article, remember that you can sign up for free to AI Collision and you’ll receive a double dose each week on Tuesdays and Fridays straight to your inbox. Just click here to sign up for free.
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