Ask typical corporate executives about their goals in adopting artificial intelligence, and they will most likely make vague pronouncements about how the technology will help employees enjoy more satisfying careers, or create as many opportunities as it eliminates. AI will “help tackle the kind of tasks most people find repetitive, which frees up employees to take on higher-value work,” IBM CEO Arvind Krishna wrote in 2023.

And then there’s Sebastian Siemiatkowski, CEO of Klarna, a Swedish tech firm that helps consumers defer payment on purchases and that has filed paperwork to go public in the United States with an expected valuation north of $15 billion.

Over the past year, Klarna and Siemiatkowski have repeatedly talked up the amount of work they have automated using generative AI, which serves up text, images and videos that look as if they were created by people. “I am of the opinion that AI can already do all of the jobs that we, as humans, do,” he told Bloomberg News, a view that goes beyond what even the most ambitious experts claim.

In interviews, Siemiatkowski has made clear he doesn’t believe the technology will simply free up workers to focus on more interesting tasks. “People say, ‘Oh, don’t worry, there’s going to be new jobs,’” he said on a podcast last summer, before citing the thousands of professional translators whom AI is rapidly making superfluous.

Krishna once turned heads when he said AI could prompt the company to slow or pause hiring for the roughly 10% of its jobs involving back-office roles such as human resources.

For his part, Siemiatkowski said AI had allowed his company to largely stop hiring entirely as of September 2023, which he said reduced its overall head count to under 4,000 from about 5,000. He said he expected Klarna’s workforce to eventually fall to about 2,000 as a result of its AI adoption.

Leaning in to automation

So far, most large companies do not appear to be replacing workers en masse. A report on 50 large banks by Evident, a firm that analyzes AI adoption, found that they typically derive other benefits from the technology, such as improving services or helping employees work faster.

In a paper exploring one area that Klarna has highlighted, customer service, Stanford University economist Erik Brynjolfsson and two co-authors found that AI made many employees more productive when it came to relatively complicated tasks, such as navigating customers’ tax issues.

The bot did this by excelling at certain simpler tasks, such as advising the human on the optimal order in which to request information from a customer. But it didn’t handle the interaction from start to finish. (In fairness, the experiment didn’t attempt full automation.)

When pressed, Siemiatkowski has conceded that the picture is somewhat more complicated than his company’s news releases have suggested. He explained on another podcast that Klarna had been relying on humans to perform customer service tasks that other companies had automated long before AI, such as instructing a customer where to go on the Klarna app to delay a payment. As a result, Klarna replaced more workers than other companies would have replaced.

His claims about hiring may have been overblown, too. The website TechCrunch searched through Klarna’s job listings more than a year after the company supposedly stopped hiring and found more than 50 openings in a variety of jobs.

All of this raises the question: At a moment when AI is already alarming office workers, why would a CEO not only speak candidly about his company’s progress in automating jobs, but even overstate the case?

A self-mythologizing rise

The son of Polish nationals who immigrated to Sweden in the early 1980s, not long before he was born, Siemiatkowski grew up feeling like something of an outsider in his parents’ adopted country.

Siemiatkowski founded Klarna, then known as Kreditor, in 2005 with two classmates after a telemarketing job alerted him to the problems that small companies had collecting payments from online customers. The idea was to guarantee the payment for merchants and collect from the customer later.

It was an old retail practice known as “buy now, pay later,” except updated for the internet age.

The company quickly turned a profit by charging merchants a fee for the payment service, and began expanding across Europe and taking business from banks. By 2010, Kreditor had renamed itself Klarna, meaning “clear,” and had begun to attract the attention of Silicon Valley investors.

Siemiatkowski gave the impression of someone who had for years been playing out the moment in his mind. When Silicon Valley venture capital firm Sequoia dispatched a partner to Sweden to pitch the co-founders on an investment, telling them Sequoia thought they could transform banking the way Google had changed the internet, Siemiatkowski was quick to pipe up. “Just tell me one more thing,” he said, recalling the exchange to Forbes magazine years later. “If we’re going to be the Google of banks, would you really just send you? Wouldn’t the whole of Sequoia come here?”

In 2019, Klarna began to build a major presence in the United States. The company’s timing proved impeccable. When the pandemic hit, Americans cut back on dining out and travel and embarked on an online shopping splurge — precisely the consumption habits Klarna was built to enable.

New investors piled in at ever-higher valuations — to $45.6 billion in 2021 from $5.5 billion in 2019. Klarna accelerated hiring, roughly tripling in size to 7,000 employees within three years.

Then the bill came due. From Google to Amazon to Netflix, the share prices of companies that had raked in profits as people retreated to their living rooms were suddenly pummeled by investors who saw rising inflation and interest rates as a sign that the pandemic-era boom was ending.

When Klarna tried to raise money again in 2022, reportedly seeking a valuation above $50 billion, investors had other ideas. A funding round announced in July would value it at a mere $6.7 billion.

In the meantime, Klarna culled about 10% of its employees, under pressure from investors to cut costs, and endured suddenly skeptical media coverage.

Siemiatkowski also now had to contend with another setback to his rise as a tech icon: a growing union presence inside the company.

Although morale at Klarna had generally been high because of its collaborative culture and competitive pay, a relatively small group of workers had formed a union in 2020. The union roughly doubled in size, to more than 1,000 employees, not long after the downsizing announcement in May 2022.

Siemiatkowski seemed to worry that a union would turn Klarna into just another stodgy Swedish company and hardly the muse of investors worldwide.

But as workers prepared to strike in the fall of 2023, the company backed down and signed a collective-bargaining agreement.

A “favorite” guinea pig

Siemiatkowski often says he first realized AI would upend the workaday world shortly after playing around with OpenAI’s ChatGPT in late 2022, only a few months after Klarna endured layoffs and saw its valuation crater. “I’m on Twitter in November ‘22, and somebody is tweeting, ‘You’ve got to try this,’” he said on a podcast. “I’m just like, ‘Jesus, I’m speaking to a computer.’”

He quickly arranged a meeting with OpenAI CEO Sam Altman and began pushing employees to experiment with the software.

Whatever progress Klarna made on automation, Siemiatkowski sometimes seemed as invested in spinning out a story about AI as actually using the technology.

By the time Siemiatkowski made the rounds of prominent tech podcasts last summer, in a tour that included the popular show “Acquired” and podcasts hosted by Sequoia and venture capitalist Logan Bartlett, he seemed to have distilled Klarna’s AI story to its sharpest narrative elements.

“My understanding is that you told Sam and OpenAI that you wanted to be their guinea pig,” an interviewer said.

“Their favorite guinea pig,” Siemiatkowski corrected.

A former Klarna manager, who left in 2022, said the rhetorical emphasis on AI was no accident. According to the former manager, there was a sense within the company that Klarna had lost its sheen in the media and among investors, and that Siemiatkowski was desperate to get it back.

Investors in his presence sometimes become so excited about the possibilities of displacing humans that they forget to deploy the usual euphemisms and aphorisms. During a podcast interview with Siemiatkowski, a partner at venture firm Kleiner Perkins gushed about Klarna’s “full-on automation at scale” and said, “That’s where it’s eyebrow-raising.”

At times, even Siemiatkowski can be wrong-footed by such directness. When another podcaster asked which jobs were most likely to be automated, he seemed momentarily flustered, then reached for a joke he had told Altman.

“I said to Sam, ‘What you should focus on, try to build AI that replaces CEOs, bankers and lawyers,’” he recalled, identifying three unpopular jobs. “‘Nobody will make a big fuss about it.’”