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The Swedish “buy now, pay later” pioneer said Tuesday that its new design would help users find the items they want by using more advanced AI recommendation algorithms, while merchants will be able to target customers more effectively.

Rafael Henrique | SOPA Images | LightRocket via Getty Images

Swedish technology startup Klarna is looking to take on big U.S. tech giants with its own artificial intelligence-powered image recognition tool to help people find products they want to buy.

The feature, which Klarna rolled out Wednesday, will enable users to point their phone at an item of clothing or an electronics product and find results for similar items directly within the Klarna app.

It’s similar to how Google Lens directs users to suggestions based on items captured by their camera.

The tool is trained on data from PriceRunner, a price comparison service Klarna acquired for close to $1 billion.

PriceRunner competes with the likes of Amazon, Google’s shopping comparison service Google Shopping, and French-founded firm Kelkoo.

We see AI as a huge opportunity for Klarna and the way we are approaching it is to provide everyone at Klarna with the tools and support to use AI in their day-to-day jobs,” David Sandstrom, Klarna’s chief marketing officer, told CNBC.

“Our unique operating model gives us the agility to take advantage of emerging opportunities that deliver superior consumer benefits, such as AI, faster than sprawling traditional banks and credit card companies.”

Klarna users will be able to point their phone at an item of clothing or gadget and find recommendations on similar products directly within the Klarna app.

Klarna

Sandstrom said the appeal of Klarna’s image recognition tech over Google is that Klarna is focusing more specifically on a shopping experience rather than pointing users toward more general search results on the web.

AI push

Klarna, which was founded in Stockholm in 2005, exploded in popularity over the Covid-19 pandemic as more and more people turned to online shopping to fill up their wardrobes.

The company’s zero-interest credit model proved particularly popular for younger, less affluent consumers lacking the credit history to successfully apply for a credit card.

The company’s market value ballooned to $46 billion at the peak of the low interest rate-fueled tech stock frenzy.

Since then, Klarna has had a tougher time in the market, with its valuation sinking 85% to $6.7 billion. The company also laid off 10% of its global workforce last year.

This year, Klarna has been looking to AI to help it become a leaner business as it, like plenty of other fintech firms, pushes aggressively toward profitability.

In August, Klarna reported a single month of profit in the first half of 2023, marking a return to profitability for the firm for the first time since it slipped into the red in 2020.

Klarna says that more than 2,500 of its total 5,000 employees have access to the OpenAI API, which allows them to integrate the Microsoft-backed company’s technology directly into their own tools and services.

Still, regulators, not least the European Union, have become wary about the rapid advancement of generative AI technology, which generates new material in response to human inputs.

Sandstrom urged Europe not to risk falling behind in the global race toward AI.

“I still have my hopes up when it comes to Europe,” he told CNBC. “I think we take a lot of inspiration on what is coming out of China. They have their benefits when it comes to progress there.”

“A lot is obviously happening in Silicon Valley as well, but there is no rational reason why Europe should be behind.”

“I also think the world in general needs to lean into AI and start working with it and see where it can go right and where it can go wrong before passing judgment,” Sandstrom added. “Currently, I think it’s way too premature.”

Focus on shopping

Klarna has for years offered users the ability to pay for items over installments using a model known as “buy now, pay later.” But it has been increasingly trying to build out its offering to include more features specific to shopping.

The company overhauled its app in April this year with new features for personalizing users’ feeds to help them find the items they want with more advanced AI recommendation algorithms, inspired in no small part by TikTok’s addictive discovery algorithm.

Klarna is also rolling out a few other updates Wednesday. One big one is the expansion of shoppable videos in Europe. It’s a feature Klarna first brought out in the U.S.

With it, shoppers in Europe will now be able to view unboxing videos, tutorials, reviews and other clips from Klarna merchants and the firm’s own network of content creators.

Klarna is seeking to tap into the growing creator economy, tapping social media influencers with sway over consumer purchasing decisions to make its mark in the e-commerce world.

Klarna also launched its own cashback rewards program, Klarna Cash. Starting with the U.K., but rolling out to other markets in the future, Klarna Cash will allow shoppers to earn up to 10% of their purchase amount back when they pick pay now, pay in three, or pay later at the checkout of retailers with active offers.

Participating retailers will include Farfetch, River Island, The North Face and Hotels.com.

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Uber delivery chief Gore-Coty is leaving after almost 13 years at ride-hailing company

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Uber delivery chief Gore-Coty is leaving after almost 13 years at ride-hailing company

Courtesy: Uber Eats

Uber said Monday that Pierre-Dimitri Gore-Coty, one of the company’s longest-tenured top executives and the head of is delivery business is leaving after almost 13 years.

Gore-Coty joined Uber as a general manager in France in 2012, and worked his way up to become vice president of mobility for the Europe and Middle East region four years later, according to his LinkedIn profile. He was named senior vice president of delivery in 2021.

“It’s hard to imagine Uber without Pierre, because there hasn’t been much Uber without Pierre,” CEO Dara Khosrowshahi said in a statement that was part of a regulatory filing. “As one of our first employees, he was a driving force behind our global Mobility expansion and stepped up to run Uber Eats just weeks before the first Covid lockdowns.”

The company didn’t say what Gore-Coty plans to do next.

Uber also said that Andrew Macdonald, the company’s senior vice president of mobility and business operations, will become chief operating officer, reporting to Khosrowshahi. Macdonald, 41, will oversee the company’s global mobility, delivery and autonomous businesses in addition to “key cross-platform functions like membership, customer support, safety, and more,” the filing said.

Gore-Coty is one of 11 people listed on Uber’s executive team page. Macdonald is the only one who has worked at the company longer. He joined in May 2012, four months before Gore-Coty, according to LinkedIn.

“These last nearly 13 years have been the ride of a lifetime,” Gore-Coty said in the statement. “It was a true team effort, and I’m so proud of what we’ve built and the impact we’ve had on daily life in cities around the world.”

Uber shares were little changed in extended trading after closing on Monday at $83.64. The stock is up 39% this year, while the Nasdaq is about flat.

Last month, the company reported first-quarter results that beat on earnings but missed on revenue. A month earlier, the Federal Trade Commission sued Uber, alleging that the company engaged in “deceptive billing and cancellation practices” related to its Uber One subscription service.

In an interview with CNBC’s “Squawk Box,” Khosrowshahi characterized the lawsuit as “a bit of a head-scratcher for us.”

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Applied Digital shares rip 40% higher on CoreWeave AI lease agreement

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Applied Digital shares rip 40% higher on CoreWeave AI lease agreement

Vcg | Visual China Group | Getty Images

Shares of Applied Digital rose more than 40% after the company said it signed two long-term lease agreements with CoreWeave for artificial intelligence data centers.

Nvidia-backed CoreWeave climbed more than 7% following the announcement.

Financial terms of the two agreements were not provided, but Applied Digital said it expects $7 billion in total revenue during the approximately 15-year period.

“Through these newly signed long-term leases with CoreWeave, we are taking a step forward in our strategic expansion into advanced compute infrastructure,” said Applied Digital CEO Wes Cummins in a release announcing the news.

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CoreWeave will provide AI and high-performance computing infrastructure for the Applied Digital data center campus in Ellendale, North Dakota, according to the release.

Applied Digital will provide 250 megawatts of critical IT load for CoreWeave. The campus is designed to host 400 MW of load.

CoreWeave shares have been on a tear over the past couple of weeks, setting a record high of $130.76 on May 29. The company, which rents AI servers powered by Nvidia chips, started trading at $39 on March 28.

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Amazon’s pricing controls may be anticompetitive, German regulator warns

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Amazon's pricing controls may be anticompetitive, German regulator warns

Packages with the logo of Amazon are transported at a packing station of a redistribution center of Amazon in Horn-Bad Meinberg, western Germany, on Dec. 9, 2024.

Ina Fassbender | Afp | Getty Images

German antitrust regulators warned Amazon on Monday that the company’s pricing mechanisms for third-party sellers could run afoul of competition laws.

The Federal Cartel Office said in its preliminary assessment that Amazon’s pricing controls limit the visibility of merchants’ products and, “based on non-transparent marketplace rules,” interfere with their freedom to set prices.

Amazon uses algorithms and statistical models to calculate certain price caps for products, the Cartel Office said. Products that are flagged as having “prices that are too high” or “prices that are not competitive” can then be demoted in search results, excluded from advertising or removed from the buy box, they added.

The buy box is the listing that pops up first when a visitor clicks on a particular product, and the one that gets purchased when a shopper taps “Add to Cart.”

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“Competition in online retail in Germany is largely determined by Amazon’s rules for the trading platform,” Federal Cartel Office President Andreas Mundt said in a statement. “Since Amazon competes directly with other marketplace retailers on its platform, influencing competitors’ pricing, even in the form of price caps, is fundamentally questionable from a competition perspective.”

Amazon’s pricing practices not only threaten sellers’ businesses, but could also harm other retailers by deterring them from offering lower prices, the Cartel Office said.

An Amazon spokesperson said the company strongly disagrees with the Cartel Office’s preliminary findings. They added that any changes to Amazon’s pricing mechanisms would be “bad for customers and selling partners.”

“If Amazon is prevented from helping people find competitively priced offers, it will lead to a bad shopping experience for them, as we’d need to promote uncompetitive or even abusive pricing in our store,” the spokesperson said in a statement. “This would mislead customers into thinking they’re getting good value when, in reality, they’re not.”

Amazon can provide feedback to the Cartel Office on its preliminary assessment before it reaches a final decision.

Amazon in 2022 reached a deal with European Union antitrust regulators who were investigating its use of seller data and buy box practices. As part of the settlement, Amazon agreed to display a second buy box on products sold in Europe when there is a second competing offer that’s different on price or delivery.

The U.S. Federal Trade Commission is also probing Amazon’s use of pricing algorithms on its sprawling third-party marketplace as part of a wide-ranging antitrust lawsuit filed in 2023. Amazon has said the FTC’s complaint is “wrong on the facts and the law.”

The case is set to go to trial in October 2026.

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