$14.6B Klarna Stops Hiring Because…

$14.6 billion valuation Klarna has stopped hiring. Why is that, Neil?

I saw the post on TechCrunch. They decided that they can end up replacing a lot of people with AI combined with they just naturally have turnover.

So their CEO said this: Klarna CEO stopped hiring employees last year because, quote unquote, AI can do most jobs and is down -22% headcount to 3,500. So the private Swedish buy now, pay later company is worth $14.6 billion. Up from $6.7 billion in 2022, but down from $45.6 billion in 2021, is trying to go public next year. That's pretty contrarian. But guess who they're hiring right now? It's almost like mostly engineers.

So yeah, no, I think you're gonna see more and more of this coming in the future. And I think you got it spot on. I had other people tell me the other day, don't you think AI can just replace all the humans within your agency? I'm like, it can replace some, but But the people that are around it that embrace the technology, I'm like, they're going to be more valuable and they're going to be more expensive. And then you're going to have to pay for this AI technology. Probably as a business, it can help with margins, but I'm like, you still need the humans in the loop and you need AI technology. You need both.

Yeah. Look, the ones that are actively learning, those are the ones that are staying ahead of the curve and those are the ones that are actually creating versus the ones that are just doing. The humans that are just doing, they're at risk. That's what I believe. If you're just a doer long-term, I think you're at risk.

Yep.

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Yes. What do you think is going to happen there? I'll tell you what I think is going to happen there, but what do you think is going to happen there?

I think TikTok's still going to be around. So whether they have to divest or not, like, that's another story, but I think they're still going to be around.

Yeah. And I think what's going to happen is the US is going to broker a deal with, you know, some sort of company to buy it or a group of companies.

Yep. So, I mean, that it is what it is. Um, I think, I don't, I don't think TikTok is as high as it was before on Trump's list. Um, he's just got other things to worry about now.

Totally agree with you. And it's funny because I see so many people just being like, hey, if, if we don't end up doing this, we're going to end up being screwed. We're going to end up losing a lot of money. Uh, We're spending all this time on TikTok. It's going to go away. What should we do? I'm like, you think TikTok, the Chinese parent company ByteDance, is going to let go of a multi-billion, probably $100+ billion entity and let it vanish? Because no matter what, they want to own it. They want to try to own it no matter what. But if they can't, they'll probably take their $100 billion. And then people are telling me, oh, these group of people are raising money and they're going to create a consortium and buy it. I'm like, Dude, it's so hard for private equity or a group of people to buy this. It's going to be some big businesses because let's call it $100+ billion. You're going to have like a Google or Facebook, probably not Facebook because of monopoly issues, but you're probably going to have like a Google, a Microsoft, or Walmart just being like, cool, we'll put in $30 billion. Oh yeah, we'll put in $30 billion. Oh, we'll put in $40 billion. All right, you got $100 billion. Cool, transaction done. Because a lot of these guys are just sitting on tons of cash on their balance sheet. Like Apple could just buy it with cash.

Yep. Right?

Microsoft can probably get a full bank loan for the amount and put zero out of their pocket just because I believe the last time I checked, Microsoft spits off roughly $80 billion a year in free cash flow. That's a lot of money. You can do whatever you want when you're spitting off $80 billion. Yeah, a bank will finance you for that purchase.

And Alina Khan won't stop that. So, you know.

No.

Yeah. Anyway, that's it for today and we'll catch you tomorrow.