McDonald’s (NYSE: MCD) announced it has entered into a strategic agreement with IBM, as a means of cultivating artificial intelligence technology set to help the chain automate its drive-thru service. As part of the deal, IBM will purchase McD Tech Labs, previously known as Apprente. Nevertheless, financial terms have yet to be disclosed.
“In my mind, IBM is the ideal partner for McDonald’s given their expertise in building AI-powered customer care solutions and voice recognition,” McDonald’s CEO Chris Kempczinski said on the earnings call with analysts Wednesday.
The technology utilizes AI to comprehend orders made through drive-thrus. Mcdonald’s has managed to make some progress by integrating Apprente’s technology within its locations. This past summer, the fast-food chain tested the technology in a few Chicago stores and according to Kempczinski, the results demonstrated “substantial benefits” for both customers and employees.
Kempczinski continued on to say that the company would need to determine when to bring technology in-house versus going through a partnership, on a case-by-case basis.
“There are certain times when it may make sense for us to go acquire a technology so that we can accelerate the development of that, make sure that it is bespoke to McDonald’s needs.” Kempczinski said. “But at some point that technology reaches a level of development where I think getting it to a partner who can then blow it out and scale it globally makes more sense.”
However, it seems that the company intends on outsourcing the majority of its technology.
“If we do acquisitions, it will be for a short period of time, bring it in house, jumpstart it, turbo it and then spin it back out and find a partner that will work and scale it for us,” he said.
McDonald’s shares climbed 2% during premarket trading on Wednesday after releasing its third-quarter results.