Klarna, the Swedish fintech known for its innovation in payments, has decided to take a risky decision: to stop using standard tools like Salesforce and Workday to build its own internal systems with artificial intelligence (AI). After the success of its customer support automation, where AI handles 66% of inquiries, Klarna has identified a unique opportunity to optimize more areas of its business.

Why does Klarna choose AI over commercial solutions?

Klarna’s decision is based on the premise that AI-enabled software can be more cost-effective than purchasing third-party solutions. As the costs of software production and data storage decrease, Klarna is betting that creating custom internal tools with AI can lower its overhead costs.

Instead of spending millions on software licenses, Klarna could invest in its own system, better tailored to its needs and capable of evolving over time.

An example to understand this trend can be reflected in the cost structure Klarna may have when using third-party platforms and software: over a decade, software costs can easily exceed $100 million. In contrast, building a CRM with a budget of $10 million per year, powered by AI, becomes a viable strategy.

It’s equivalent to funding a startup with a Series A round of $20-30 million, but with the advantage of having a large, well-defined design partner: Klarna.

Is it sustainable to build internal systems?

This strategy is not without risks. Building internal software requires considerable technical talent and ongoing investment to maintain infrastructure and resolve issues.

In fact, many companies that have tried this approach in the past ended up reverting to commercial solutions after incurring significant expenses. Nevertheless, Klarna is moving forward, betting on an AI-based architecture that could provide them with a sustained competitive advantage.

A market that could transform

If Klarna is successful, we could see a shift in the enterprise software market, where the standard architecture could become something like this: data lakes → AI → customized software.

This idea is not so far-fetched considering that giants like Microsoft and Amazon have already achieved significant savings and productivity increases through AI. For example, Amazon saved $700 million in code restructuring with AI, and Microsoft has reported 50-70% productivity increases in software due to AI.

The AI factor: beyond technology

The most interesting aspect of this approach is that it’s not just about changing software; it’s a complete redesign of workflows. Reimagining processes with a blank slate, where AI not only performs tasks faster but also redefines how they are done, can drive innovation in ways we still do not fully understand.

As the costs of data and software continue to fall, building AI-based internal tools may become the norm for companies with the necessary resources and vision. Klarna is determined to be a pioneer in this path, but will it be enough to transform an entire industry?