Pilot AI use testing has illustrated a positive impact of dynamic lookbooks and personalized product campaigns, driving 50% order growth and 15% increase in time spent on the shopping app, and prompting Klarna and Google Cloud to form a long-term strategic collaboration.
Klarna and Google Cloud have formed a strategic, AI-first partnership under which they will jointly deliver enhanced consumer-centric products and services, designed to significantly improve the shopping experience, creative content workflows, and security for Klarna’s global user base, which currently counts over 114 million people.
Under the agreement, setting a new benchmark for how artificial intelligence can shape modern retail experiences, Klarna will leverage Google Cloud’s complete AI stack, from infrastructure and platforms to generative models, to create more engaging and personalized shopping journeys. The initiative will strengthen Klarna’s app experience through two main areas: creative velocity and personalization.
In the first phase, Klarna’s creative teams are using Google’s latest generative media models, including Veo 2 and Gemini 2.5 Flash Image, to produce dynamic digital lookbooks and hyper-personalized marketing campaigns directly within the Klarna app. These AI-driven features aim to make the browsing and buying process more interactive and tailored to individual preferences. According to early pilot results, such initiatives increased time spent in the Klarna app by 15% and impressively boosted order volume by 50%.
The second focus area, personalization and beautification, involves upgrading Klarna’s extensive library of over 200 million product images. Using Google Cloud’s generative AI models, Klarna can automatically regenerate and refine visuals to match user interests, ensuring a more visually appealing and contextually relevant shopping experience.
Beyond front-end creativity, the partnership also extends to security and fraud prevention. Klarna will use Google Cloud’s AI hardware and expertise to train and deploy graph neural networks capable of detecting suspicious activity such as fraud or money laundering. These advanced models analyze the complex web of relationships between users, transactions, and devices, enabling faster and more accurate anomaly detection without compromising user experience.
Klarna has long been experimenting with AI tools to boost customer experience across both consumer and internal operations. Within the past couple of years, the company introduced an AI-powered shopping lens that allows users to take a photo of any product and instantly find similar shoppable items across retailers.
The fintech company has also launched AI-curated shopping feeds that tailor product suggestions to each user’s preferences and browsing habits. In partnership with OpenAI, Klarna integrated ChatGPT as a shopping assistant, enabling conversational product discovery and personalized recommendations. On the operational side, Klarna’s internal AI assistant reportedly answers over 2,000 employee queries daily, automating routine tasks and improving efficiency. Together, these initiatives reflect Klarna’s ambition to embed AI into every layer of its ecosystem — from customer-facing features to behind-the-scenes decision-making.
The Klarna-Google partnership comes at a time when artificial intelligence is rapidly redefining the retail landscape. A McKinsey study found that 71 percent of consumers expect personalized interactions from brands, while 76% are frustrated when those expectations are not met. Retailers that excel in personalization achieve growth rates up to 10% higher than their peers, according to Boston Consulting Group.
The momentum behind AI-driven retail innovation continues to grow. The global AI in retail market is projected to reach $15 billion this year, rapidly expanding at an annual rate of more than 35%. Nearly 92% of businesses today use AI personalization to enhance engagement and conversion, according to Shopify. However, EY also reports that almost all large companies deploying AI have faced early operational risks or financial losses, underscoring the need for responsible and secure integration, something that Klarna appears to be addressing through its dual focus on creativity and fraud detection.
