Google presents Guetzli, a new open-source JPEG algorithm that promises up to 35 percent smaller file sizes than currently available encoders like libjpeg, while offering the same or better image quality.
Guetzli maintains compatibility with existing browsers but the downside is that it's significantly slower and requires a lot of memory (300MB of memory per 1MPix of the input image).
More details about how the new encoding algorithm works can be read at the Google Research blog. The search engine claims human raters also consistently preferred images produced by Guetzli versus those generated by libjpeg:
And while Guetzli produces smaller image file sizes without sacrificing quality, we additionally found that in experiments where compressed image file sizes are kept constant that human raters consistently preferred the images Guetzli produced over libjpeg images, even when the libjpeg files were the same size or even slightly larger. We think this makes the slower compression a worthy tradeoff.