McDonald's enters strategic partnership with IBM to automate drive-thru lanes

  • McDonald's has entered a strategic partnership with IBM to help the fast-food chain automate its drive-thru lanes.
  • As part of the deal, IBM will acquire McD Tech Labs, which was formerly known as Apprente before McDonald's bought the tech company in 2019.
  • Financial terms of the deal were not disclosed.

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McDonald's said Wednesday it has entered a strategic partnership with IBM to develop artificial intelligence technology that will help the fast-food chain automate its drive-thru lanes.

As part of the deal, IBM will acquire McD Tech Labs, which was formerly known as Apprente before McDonald's bought the tech company in 2019. McDonald's didn't disclose financial terms for either transaction.

"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 Apprente technology uses AI to understand drive-thru orders. This summer, McDonald's tested the tech in a handful of Chicago restaurants. Kempczinski said that the test showed "substantial benefits" to customers and employees.

In June, at the same conference where he disclosed the Chicago test, Kempczinski shared McDonald's strategy for tech acquisitions.

"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.

CFO Kevin Ozan said that less than 100 employees will leave McDonald's to work for IBM.

"It isn't a big financial statement impact, plus or minus, I'll say, going forward from that," Ozan said.

Shares of McDonald's rose 2% in premarket trading Wednesday after the company released its third-quarter results. The fast-food chain's earnings and revenue topped estimates as its international markets bounced back.

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