McDonald's (MCD) will end its AI drive-thru partnership with IBM (IBM) in late July after a surge in customer complaints about incorrect orders, even though the fast-food chain plans to continue incorporating AI into its business model.
Morning Brief anchors Brad Smith and Shauna Smith explain McDonald's latest developments and what they mean for the company's future.
Watch Yahoo Finance's full interview with Joe Park, chief technology officer at Yum! Brands (YUM), who discusses how the company is testing AI tools and automation in its Taco Bell, Pizza Hut and KFC restaurants.
For more expert insights and the latest market trends, click here to listen to this entire episode of Morning Brief.
This post Nicholas Jacobino
Video Transcript
Now, while McDonald's has shut down its AI ordering system for now, the fast-food giant partnered with IBM in 2021 to introduce AI drive-thru technology to help McDonald's fulfill orders faster and keep up with growing demand.
However, the technology is due to be officially shut down by July 26th.
Apparently customers kept records at over 100 restaurants.
The order went wrong and I guess, well, the frosty machine is still not working.
McFlurry machines may be using AI.
They should have put their money there. They should have put their money there.
But I think that really sums up the conversation around AI.
So we're talking about the fact that more and more companies are adopting this technology, trying to take advantage of it, making capital investments in adopting AI, and certainly in some cases, it's not living up to expectations and you're obviously talking about reliability, but at least in this case, there was an issue of reliability.
The order is messed up to say the least.
So they're taking a little break.
However, this doesn't mean McDonald's will abandon future AI efforts.
Of course, they commented that they are also considering incorporating AI technology in the future.
But now they're taking a bit of a break again to reevaluate what their current partnership is.
What exactly are they using AI for in their business?
And after what it calls “thoughtful consideration,” it is considering the possibility of reintroducing AI in the future.
But for companies beyond McDonald's looking to use AI to improve their current operations, many questions remain about what this means specifically and how trustworthy the AI can be.
I recall last week Oracle and Larry Ellison were talking about more than just language learning models for artificial intelligence.
It's a neural network.
Given the complexity of neural networks, we cannot all speak perfectly like Americans, and we all have different tones when we speak.
There are so many nuances in the way we speak depending on whether you live in Boston or grew up in Philadelphia or Texas.
So these AI models take time to really understand what we are actually saying, i.e. how many times we are actually saying it.
And was it right?
It's like setting a timer for two years from now.
If I say set it at two hours, base it on how you actually pronounce it.
The pronunciation, the enunciation, the different tones of voice that we speak in will be difficult, and will be difficult, especially for something that is expected to go as fast as a driver, but I should also point out that this was very important.
So McDonald's is clearly not the only restaurant that has been testing out AI's capabilities.
Some of the companies that have incorporated robotics and AI into their investments in recent years have been very successful, including Wing Stop Del Taco and Chipotle Yum Brands.
So, McDonald's is adopting AI, but is taking a break and reevaluating its investment.
I think we’ll have a bit more success in the second round.
Only time will tell on that small front.
