Klarna’s founder and CEO, Sebastian Siemiatkowski, has taken to X to reiterate the reasons behind the company’s decision to ditch Salesforce’s flagship CRM product in favor of its own in-house AI system, approximately a year ago.

However, Siemiatkowski emphasized that he does not believe other companies will, or should, follow in Klarna’s footsteps. In his words, “I don’t think it is the end of Salesforce; might be the opposite,” as he recently wrote.

The news of Klarna’s development of an in-house AI system, based on OpenAI’s ChatGPT, which led to the company dropping its contract for Salesforce CRM, went viral in September. This announcement came after Siemiatkowski discussed the project during an investor day, revealing that it resulted in the replacement of 700 full-time contract employees and an estimated annual savings of $40 million.

In response, Salesforce founder and CEO Marc Benioff expressed skepticism regarding how Klarna manages its customer data and meets its compliance requirements. Siemiatkowski recalled the incident, stating, “Suddenly, @Benioff was asked on stage why Klarna was leaving Salesforce. I was tremendously embarrassed.”

As Klarna is expected to go public next month, which would require the company to disclose its confidential financial information, Siemiatkowski is providing clarification. He wants to assure the public that Klarna is not uploading all of its customers’ data into OpenAI, but rather consolidating data from various SaaS systems, including Salesforce, onto its own internally developed tech stack.

Although Siemiatkowski did not specify where Klarna has moved its data, he mentioned that the company is utilizing Neo4j, a Swedish company, and its graph database. He emphasized that Klarna did not replace its SaaS with a large language model (LLM), as storing CRM data in an LLM would have limitations.

Instead, Siemiatkowski explained that Klarna developed an internal tech stack using Neo4j and other tools to bring data and knowledge together. This allowed the company’s internal AI to utilize this knowledge and, with the help of @cursor_ai, quickly deploy new interfaces and interactions.

This debate is part of a long-standing discussion in the enterprise software industry: whether to build or buy software. Siemiatkowski believes that most companies will not opt to build their own next-generation AI-centric software.

However, he predicts that the SaaS industry will experience significant consolidation, with fewer companies dominating the market and offering their solutions to others. As he wrote, “Will all companies do what Klarna does? I doubt it. On the contrary, much more likely is that we will see fewer SaaS consolidate the market, and they will do what we do and offer it to others.”