Klarna, a leading buy now, pay later (BNPL) services company, has taken an innovative step by using an AI doppelganger of its CEO, Sebastian Siemiatkowski, to report its quarterly earnings. The AI-generated video, published on Klarna’s official YouTube channel, featured an avatar dressed similarly to Siemiatkowski, delivering the earnings highlights. Despite minor technical issues like a lack of blinking and imperfect lip syncing, the video managed to convey the company's strong performance in a unique way. In a recent press release, Siemiatkowski highlighted Klarna’s “AI-first strategy” as a key driver of the company’s success. According to the CEO, this approach has led to exceptional returns, outpacing competitors, and rapidly expanding its merchant network. Additionally, Klarna’s next-generation products are reportedly reshaping money management for millions of users. However, this technological leap comes against a backdrop of significant restructuring within the company. Klarna has been streamlining its workforce, with a 40% reduction since 2022. In 2022, the company laid off 800 employees, followed by additional silent exits through an internal talent pool in 2023. Most recently, in February 2024, Klarna unveiled its partnership with OpenAI to deploy AI customer service agents capable of handling the equivalent workload of 700 full-time human employees. These measures underscore the company’s commitment to leveraging AI to enhance efficiency and reduce costs. Klarna has also bolstered its presence in the market through strategic partnerships with major platforms such as Walmart, eBay, and DoorDash. These collaborations have expanded Klarna’s reach and integrated its BNPL services into a broader range of consumer experiences. However, the BNPL industry faces ongoing scrutiny from consumer watchdogs and regulatory bodies, raising concerns about overspending and financial fragility among users. Under the Biden administration, the Consumer Financial Protection Bureau (CFPB) initially classified BNPL providers as credit card lenders, implementing stricter rules around transparency and dispute resolution. On May 6, 2024, the CFPB announced it would no longer enforce these regulations and considered rescinding them, easing the compliance burden on companies like Klarna. Nonetheless, a 2024 Federal Reserve study revealed that BNPL users are more prone to relying on high-interest financing options and experiencing financial strain. A recent survey by LendingTree, conducted in April 2025, further corroborated these findings, showing that 41% of BNPL users in the U.S. had paid late over the past year, compared to 34% the previous year. This trend indicates growing financial instability among BNPL customers, aligning with the Federal Reserve's earlier concerns. Klarna’s Q1 2025 results reflect both progress and challenges. While revenue increased by 13% year-over-year, reaching 100 million active users, the company’s net losses nearly doubled from $47 million in Q1 2024 to $99 million in Q1 2025, a 110% surge. During the May 19 earnings call, Klarna attributed this sharp increase in losses to various one-off costs, including depreciation, share-based payments, and restructuring efforts. The company’s financial report also indicated a 17% rise in credit losses, from $117 million in Q1 2024 to $136 million in Q1 2025, driven by the rapid expansion of its Pay Later and Fair Financing products. Despite these financial setbacks, Klarna remains committed to its AI and BNPL strategies. The company believes that integrating advanced AI technologies will continue to drive efficiency and innovation, despite potential regulatory and consumer risks. The AI doppelganger of its CEO serves as a bold statement, emphasizing the company’s focus on cutting-edge tech solutions. Industry insiders view Klarna’s use of AI as a double-edged sword. While it showcases the company's commitment to innovation and efficiency, it also raises questions about the ethical implications of using AI in sensitive areas like financial reporting. Some experts suggest that while AI can streamline processes, the human touch remains crucial in building trust and ensuring transparency. Klarna’s recent financial performance and growing credit losses indicate that the company must balance technological advancements with robust risk management to maintain its competitive edge and consumer trust. Klarna, founded in 2005 and headquartered in Stockholm, Sweden, has become a global leader in BNPL services. The company operates in over 20 countries and is known for its user-friendly interface and seamless integration with e-commerce platforms. However, its aggressive growth and AI-driven strategies come with significant risks and challenges, particularly in the current economic climate.