McDonald's will end AI drive-thru partnership with IBM

McDonald's (MCD) will put an end to its AI drive-thru partnership with IBM (IBM) in late July as many customer complaints over botched orders began to mount. The fast-food chain does have plans to continue implementing AI into its business model down the line.

The Morning Brief Anchors Brad Smith and Seana Smith break down the latest developments for McDonald's and what it means for the company moving forward.

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This post was written by Nicholas Jacobino

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Well mcdonald's is pulling the plug on its A I ordering system for now, the fast food giant partnered with IBM on its A I drive through tech back in 2021 to help mcdonald's expedite its orders and meet growing demand.

But the technology will officially shut off no later than July 26th.

At more than 100 restaurants, customers were apparently documenting.

They're botched orders ordering a Well, I guess the, the frosty machine still probably doesn't work.

The, the mcflurry machine maybe use A I.

That's where they should have put the money, the money there.

But I think that this is just this kind of encapsulates the A I conversation, right?

We talk about the fact that more and more companies are deploying this technology trying to use it, investing Capex dollars into incorporating A I. Yeah, it's not exactly living up to those expectations in some instances and you talk about reliability clearly, at least with this instance, there has been a reliability issue.

Orders are being uh messed up to say the least.

And so they're taking a bit of a pause.

Now, this isn't to say that mcdonald's is abandoning the A I efforts going forward.

They have made some comments that they are, of course looking to incorporate A I technology down the road.

But again, they're taking a little bit of a break, they're reassessing what the current partnership is.

What exactly they're using A I for in their business.

And then once they do that after a quote unquote thoughtful review, then they are looking to possibly reintroduce A I down the road.

But again, lots of questions about what exactly this means even beyond mcdonald's for companies that are looking to use A I to improve their operations today and how reliable it is.

I, I kind of think back to what we just heard from oracle and, and Larry Ellison just last week where he was talking about how it's more than language learning models for artificial intelligence.

It's about them being neural networks.

And when you think about the complexity of neural networks, not all of us speak perfectly as Americans, like we all have different types of tone that we speak with.

There's so much nuance to the way that we talk, whether you're in Boston or you grew up in Philly or you grew up in Texas.

And so these A I models need some time to really figure out what the heck we're actually saying, like, how many times have you actually spoken even to?

And it gotten it right?

Like it's setting a timer for two years out from now.

When you said set it for two hours be based on how you actually pronounce it.

So pronunciation annunciation, all of these different kind of tones of voice that we speak with, especially for something that's supposed to be as fast as a driver that's gonna be challenging and it's gonna come, it's gonna be challenging, but it's also important to point out that this has been critical.

I mean, mcdonald's is far from the only restaurant obviously that has been testing A I capability.

Some have been doing it very successfully successfully when you take a look at some of those other names, Wing Stop Del Taco, Chipotle Yum brands, among those that have been incorporating robotics and A I here in their investments in most recent years.

So this is in the end for mcdonald's and incorporating A I but they are taking a bit of a break, they're reassessing their investments there.

We'll see round two is gonna be a little bit more, I guess successful.

Only time's gonna tell that small front.