Case 8: McDonald's and IBM could bring AI-powered drive-thrus McDonald's might not be the only restaurant experimenting with AI-based order taking in the near future. Restaurant Dive reports McDonald's is selling its McD Tech Labs to IBM in order to "further accelerate" work on its automated voice ordering systems. The deal will help apply the technology to a wider variety of countries, languages and menus, McDonald's said, while bolstering IBM's Watson- powered customer service offerings. The deal is expected to close in December. McD Tech Labs will join IBM's Cloud & Cognitive Software team. McDonald's started testing AI drive-thru order taking in 10 Chicago-area restaurants in late spring. While the fast food chain saw "substantial benefits" for both customers and staff, it was clear the system needed improvement. It was only about 85 percent accurate, necessitating human intervention for nearly a fifth of orders. CEO Chris Kempczinski said it would take more than a year or two to implement the technology on a broader scale, and indicated that McDonald's routinely bought companies (like the AI firm Apprente) for short stints before spinning them out with partners who can expand the technology - it clearly sees IBM as key to making AI drive-thrus a success, at McDonald's and elsewhere. It's not clear whether or not restaurant employees should be thrilled. This will save staff from the drudgery of listening to orders at 2AM, but it also raises the possibility of job cuts as restaurants limit human involvement to preparing orders. As before, automation could be a double-edged sword that hurts as much as it helps. The software was found to be 85% accurate, according to CEO Chris Kempczinski. Implementing this technology at its 14,000 restaurants across the US is expected to take roughly two years. While AOT can boost speed and accuracy, the challenge of including several languages as well as the McDonald's menus from 40,000 locations across the world 'is beyond the scale of our core competencies', said Kempczinski on an earnings call. IBM's expertise in developing customer care solutions powered by AI and natural language processing is expected to advance the AOT technology through the integration of additional languages, dialects and menu variations. The advanced AOT will help the fast-food chain take orders in more languages and dialects. IBM expects this acquisition to complement the current work of developing and delivering AI-driven customer care solutions through IBM Watson. Completion of the deal is subject to regulatory approvals as well as other customary closing conditions. It is expected to close by December. Upon completion of the transaction, McDonald's McD Tech Labs team will become a part of the IBM Cloud and Cognitive Software division. Source: Verdict Food Service (2021)