IBM adds side order of NLP to McDonald's AI drive-thru chatbots

CEO talks up 'great economics to franchisees ... through the power of software... AI and creative construct'

IBM says it is rolling out its natural language processing software to a greater number of McDonalds' drive-thrus months after buying the automated order technology unit from the fast food chain, along with the team that developed it.

IBM already added extra NLP features to its Watson Discovery enterprise AI service last year, and now the burger-flinger's AI chatbot will feel the benefit, it said.

In October last year, Big Blue wolfed down the McD Tech Labs, which was itself created after McDonald's bought and renamed AI voice recognition startup Apprente in 2019.

Automated ordering had been piloted at 10 Mcshacks in Chicago in June 2021, with humans reportedly not required to intervene in circa four out of every five orders made with the AI drive-thru bots.

Talking at JP Morgan's 50th Annual Global Technology, Media and Communications conference, Rob Thomas, senior veep of Global Markets at IBM, said Big Blue was "taking on a business that they'd [McDonalds] kind of struggled with around ordering."

He said IBM "built a thesis" around automated order technology (AOT): "we could use our natural language processing technology, which is very good, to augment the McDonalds' technology," he said, adding: "We're now starting to roll that out to many of their stores, eventually all their stores."

He said this is a "great application of technology" in a time of "wage inflation" when there is a need for "quick service" restaurants.

"We can do all the drive-thru ordering without requiring human intervention, every once in a while something will kick to the human, but it drives great economics to franchisees all through the power of software and through AI and creative construct."

Thomas didn't open up more about the specifics of the software IBM has integrated into AOT. We have asked the company for additional comment.

Drive-thru options are located in tens of thousands of McDonalds outlets across the world, including 95 percent of its restaurants in the US. Since the pandemic began in March 2020, around 70 percent of sales in its biggest market were generated by drive-thrus.

In an October earnings call for McDonalds' calendar Q3 2021, CEO Chris Kempczinski said of the sale of Tech Lab to IBM that it was about getting the development work to "a partner who can then blow it out and scale it globally."

He said he'd been pleased with the progress of the 100 or so employees working in Tech Lab, whom he said were transferred to IBM. "But there's still a lot of work that needs to go into introducing other languages, being able to do it across 14,000 restaurants with all the various menu permutations, etc. And that work is beyond the scale of our core competencies." ®

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