Is Going 'AI First' Already Backfiring? Lessons from Klarna and Duolingo

AI was supposed to revolutionize the future of work—but companies like Klarna and Duolingo are learning the hard way that replacing humans with algorithms isn’t as simple as it sounds. From customer service chaos to social media outrage, their aggressive AI-first strategies are sparking backlash. What went wrong—and can these companies course-correct? Let’s dive in.

🤖 The AI-First Backlash: What Went Wrong?

Klarna and Duolingo bet big on AI to cut costs and boost efficiency. But their strategies are hitting unexpected roadblocks:

Klarna’s 180° Turn: After replacing 700 customer service agents with AI in 2023, the fintech giant is now on a hiring spree to bring back human support. CEO Sebastian Siemiatkowski admitted AI-driven cost-cutting led to lower service quality.
Duolingo’s Social Media Nightmare: The language app’s decision to replace contractors with AI sparked a TikTok revolt. One comment criticizing the move garnered 69,000 likes, while users threatened to delete the app en masse.
Underlying Tensions: Both cases reveal a deeper issue: Public distrust in AI’s ability to handle nuanced tasks. A Harvard study notes humans fear losing control to automation, especially in fields like education where empathy matters.
Gen Z’s AI Anxiety: 40% of employers plan to replace workers with AI (per the World Economic Forum), but nearly half of Gen Z job seekers say AI devalues their education.

✅ The Fixes: Can Humans and AI Coexist?

Companies are scrambling to balance automation with human touchpoints:

Klarna’s Hybrid Model: The company now emphasizes AI as a supplement, not a replacement. It’s recruiting rural and student workers to ensure live human support remains an option.
Duolingo’s Damage Control: The app insists AI is merely a tool for its learning experts, claiming content is still “guided by humans.” Meanwhile, its stock price hit record highs despite the backlash.
Cost vs. Quality: Klarna’s CEO admits overprioritizing savings hurt quality—a cautionary tale for others. Duolingo’s 2025 sales forecast upgrade suggests investors still believe in the AI-first math.

Feasibility Check: Klarna’s pivot shows adaptability, but Duolingo’s PR crisis highlights the risks of poor communication. Success depends on transparency about AI’s role.

⚠️ The Challenges: Why AI Still Scares Us

Even “enhanced” AI strategies face hurdles:

Public Distrust: Users equate AI-first with “people-last.” Duolingo’s TikTok backlash proves automation feels impersonal in creative/educational fields.
Regulatory Risks: No major rules exist yet for AI workforce displacement—but consumer pressure could force governments to act.
The Control Paradox: Harvard researcher Julian De Freitas notes humans resist innovations that reduce their control. Full automation triggers existential anxiety.

🚀 Final Thoughts: Can the AI-Human Balance Work?

The Klarna-Duolingo saga reveals three truths:

✅ AI Isn’t a Magic Bullet: It excels at repetitive tasks but struggles with empathy and complexity.
📉 Reputation Risks Are Real: Social media amplifies anti-AI sentiment—companies need clearer messaging.
🚀 The Hybrid Future: Winners will blend AI efficiency with human creativity. As Klarna’s CEO says, “Investing in quality human support is the way of the future.”

What do you think? Can companies successfully balance AI and human workers—or is this just the start of a larger backlash?

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Sources: Chris Morris. Going ‘AI first’ appears to be backfiring on Klarna and Duolingo, May 12, 2025. https://www.fastcompany.com/91332763/going-ai-first-appears-to-be-backfiring-on-klarna-and-duolingo