Warranties down ~26% post-AI rollout
Since deploying AI sidekick agents to Kavak's mechanics, warranty claims fell by approximately 26%, reflecting higher-quality car inspections.
Snapshot · The a16z Show
The Self-Improving Company | Kavak's AI Playbook
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Aug 10, 2026
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The AI CEO Experiment: 50% Profit Growth in One Month
At 17:58 · chapter starts 15:55
Alejandro turns to one of the most audacious experiments in the episode. The team asked a simple but alarming question: could an AI do the CEO's job? Rather than debate it theoretically, they ran the experiment. Cuernavaca — a mid-sized Mexican city — was chosen as the test site. An AI agent was given the CEO role, access to all company systems, and a mandate to double monthly profits. It fell short of that goal but still delivered 50% profit growth in its first month [1] — Alejandro Maza Ayala "AI CEO raised profits 50% in 1 month: An AI agent deployed as 'CEO' of Kavak's Cuernavaca city operation increased profits by 50% within it…" 16:24 — by making Fields Medal-level analytical moves across inventory rotation, financing penetration, and customer satisfaction simultaneously. It sent daily task plans to every physical worker via message and collected voice-note updates on progress. For roles where physical dexterity remains irreplaceable — the company's approximately 800 mechanics — Kavak took a different approach. It built 'El Mike', an AI sidekick inspired by Ratatouille's Remy that guides mechanics through inspections step by step. Since launch, inspection quality rose, repair speed increased, costs fell, and warranty claims dropped by roughly 26% [2] — Alejandro Maza Ayala "Warranties down ~26% post-AI rollout: Since deploying AI sidekick agents to Kavak's mechanics, warranty claims fell by approximately 26%, r…" 17:58 .
The AI CEO That Raised Profits 50% in One Month
Kavak carved out a city in Mexico, gave an AI agent the CEO role, and watched it raise profits by 50% in its first month. The agent sent daily task plans to every physical worker, monitored KPIs in real time, and micromanaged inventory, financing, and customer satisfaction simultaneously.
AI CEO raised profits 50% in 1 month
An AI agent deployed as 'CEO' of Kavak's Cuernavaca city operation increased profits by 50% within its first month.
Mechanics Get a Ratatouille-Style AI Sidekick
Physical dexterity is still irreplaceable. So for Kavak's 800 mechanics, the company built 'El Mike' — an AI sidekick inspired by Ratatouille's Remy, guiding mechanics through inspections and repairs. Result: faster inspections, higher quality cars, and a 26% drop in warranty claims.
The Jedi Academy: Training Every Employee to Build AI Agents
Kavak launched the Jedi Academy, an internal program where every employee — from CEO to mechanics — completes a 6-week training and ships a production-ready AI agent. The message to staff was blunt: train and adapt, or this may not be the right place for you.
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