Welcome to Leading Edge, Edition 4! 🎉
AI has been making waves across all industries, and this week's edition of The Leading Edge gives an inside look at the ripples. From Klarna using AI to automate 700 jobs and boost profits by $40 million, to companies like IBM and Meta cutting workforces while becoming more profitable thanks to AI, the technology is clearly having a major impact.
I hope you enjoy this sneak peek into the transformative and turbulent world of AI.
How Klarna is saving $40M (by automating 700 jobs) with Generative AI
Perhapsthe biggest story of last week in AI was Klarna's post on AI Chatbots.
Klarna’s achievements on their new OpenAI powered chatbot is impressive as well as a bit scary.
The system has been live for 1 month now.
And has handled 2.3 Million customer conversations - 2/3rds of all customer conversations. They estimate the bot doing the work of nearly 700 full-time agents!
Also estimated is a $40M boost to Klarna’s 2024 profits while excelling in every possible benchmarks relevant for customer support.
Here’s four:
🔑 Average resolution time down from 11 mins to just 2 mins
🔑 More inclusive: offering support in 35 languages
🔑 Higher accuracy, leading to 25% reduction in repeat enquiries
🔑 Faster responses - how does a 7 second response sound?
In short : a win for customers, a win for Klarna.
And if you are in support, i am calling out for a big bad AI Iceberg coming your way.
Change course now.
And that brings me to the next topic, very closely related.
Job cuts and The AI Duck Test
In 2023, IBM increased their Net Income by a whopping 358%, but still cut headcount by 1.5%!
And it’s not just IBM.
Meta cut 13% workforce while boosting their profitability by 73%.
And so many more (see graphic above).
CEOs are tiptoeing around the elephant in the room. They proclaim, "We're not restructuring because of AI”.
But actions speak louder than words.
They have a point though : Raj the programmer won’t lose his job because of AI. Instead Raj will get Github Copilot and ChatGPT assistance to substantially increase his productivity. Raj’s boss now expect him to be twice as productive, and he’s probably even getting hikes as the company’s more profitable.
But what about the programmer down the hall? Her job was eliminated as bosses were trimming the fat.
You can call it a swan.
But If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
Mistral Le Chat : The ChatGPT Alternative
When Mistral 7B was announced in Sep 2023, they were clearly an underdog.
Since then, Mistral AI has made some great products in the foundational model space.
The company, now valued at $2Bn has made some great strides in open source models with Mistral 7B and Mixtral 8x7B.
Not an underdog anymore.
However just likeOpenAI it has now focused more on closed source and now they have made multiple releases:Mistral Large comes very close very close to GPT4 in terms of performance, unfortunately also on price 25% less).
In a newly announced partnership deal with Microsoft, Mistral Large will be available with Microsoft Azure. Also Microsoft picked up some minor stakes in the company which has not amused the EU, as Mistral was lobbying hard for influencing the AI Act.
I tried their ChatGPT equivalent, Le Chat.
It definitely not what I would consider as a ChatGPT beater. However, it’s a good alternative.
It’s definitely slower, but I guess this is something they would solve soon.
Mistral handles 5 European Languages well - better than ChatGPT - English, French, Spanish, Italian, and German.
Have you tried Le Chat? What’s your feedback?
The Ghost of Startups Past
A firm goes down in valuation by 95%!
Actually, not just any firm, a firm once valued at $22Bn.
Pretty much everyone in the board quits - other than the founder and his immediate family (founder, his wife and his brother are still in the board).
The shareholders call an EGM meeting and disbands the founder as the CEO and also the Board.
The company is fighting the EGM. Lawsuits fly. The founder is still hanging on to the CEO title.
Where have I heard this story before? And why is this happening again? 😞
Until next week...
And that's a wrap for this week's edition of The Leading Edge! 🌟
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