Intelligent investors know that artificial intelligence (AI) has enormous potential. Most of us have tested some type of AI chatbot like ChatGPT or Perplexity. We also know that there’s a massive amount of investment happening with AI-related chips, which we saw last week from the world’s largest provider of GPUs (graphics processing units). Recently, Google’s former CEO Eric Schmidt said that AI “will double everyone’s productivity” with the caveat that it was his opinion without proof. We’ve heard about the promise of AI, but where is the evidence that these massive investments will deliver handsome returns?
Klarna AI Assistant Powered by OpenAI |
| Has had 2.3 million conversations, 2/3rds of total customer service chats |
| It is doing the equivalent work of 700 full-time agents |
| Customer satisfaction is on par with human agents |
| It is more accurate in problem resolution, leading to a 25% drop in repeat inquiries |
| Resolution is achieved in less than 2 minutes vs. 11 minutes previously |
| It is available in 23 markets 24/7 and communicates in over 35 languages |
| It is expected to drive $40m in profit improvement in 2024 |
Source: Klarna, HFS
This past week, a lesser-known company gave us some proof. Klarna, which is a privately held payments company based in Sweden revealed some fascinating results of its AI virtual assistant. After just a month of rolling this out globally, it already handles two-thirds of all customer service chats totaling 2.3 million conversations. Customer issues were resolved in less than 2 minutes compared to 11 minutes previously. The firm added that this was equivalent work of 700 human agents at the same level of customer satisfaction. Klarna believes that its AI assistant will generate $40 million of savings in 2024.
AI models are not just being trained. They’re being implemented and used. The more fruitful the use cases, the more investment should be expected. Just last week, the world’s largest AI chip supplier said that an estimated 40% of its related sales over the past year were being used for “inferencing” as opposed to “training”. Unlike training, “inferencing” refers to servicing end customers that are accessing a trained AI model. In other words, 40% of its sales were related to people actually using AI.
Our goal is for clients to understand AI along with some perspective on what its future could unlock. The more we understand, the more we begin to appreciate its potential and how it may change our economy, market, and lives for the better.
The opinions expressed are those of Harrison Financial Services as of March 1, 2024 and are subject to change. There is no guarantee that any forecasts made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment or security. Please remember that all investments carry some level of risk, including the potential loss of principal invested.