Bulletins

McDonald’s just sold another tech company, but will continue its AI and data experiments

McDonald's partners Mastercard and IBM will work with the fast-food giant to develop AI-based personalized in-store content and automated ordering tech.

McDonald's

McDonald's partner Mastercard will work with the fast-food giant to develop AI-based, personalized in-store content and automated ordering tech.

Photo: McDonald's

McDonald's is taste-testing tech.

The company announced Wednesday it has sold another tech company it only just bought in 2019 — targeted digital kiosk company Dynamic Yield. The sale comes after its October sale of McD Tech Labs, which it created to house Apprente, the voice-recognition company it bought the same year as Dynamic Yield to advance AI-enabled automated ordering.

But don’t think the fast-food giant has bitten off more than it can chew; unloading its tech purchases seems to have been part of the plan all along. “If we do acquisitions, it will be for a short period of time, bring it in-house, jump-start it, turbo it and then spin it back out and find a partner that will work and scale it for us,” McDonald’s CEO Chris Kempczinski said at a conference earlier this year.

Dynamic Yield and Apprente both were sold to partners that will continue providing the technology to McDonald's. Mastercard is the new owner of Dynamic Yield, and the technology could be a good fit for the credit card provider. Mastercard has monetized the massive amounts of purchase transaction data flowing through its system for years by selling consumer data products and ad targeting services.

The company envisions turning that data into personalized content and advertising in digital kiosks in stores. ”The notion of going into a store or opening a webpage to find an experience perfectly tailored to you is no longer farfetched,” said Raj Seshadri, president of data and services at Mastercard in a press release about the acquisition.

Then there's the voice recognition system IBM added to its IBM Cloud and Cognitive Software division when it bought McD Tech Labs. McDonald's has used it to develop and test automated ordering tech at drive-through windows, in part to counteract the current labor shortage.

Although McDonald's said it intends to continue to use that technology, which “will continue to be integrated into McDonald’s highly secure technology ecosystem,” it has led to legal problems. McDonald's has tested the voice recognition AI in Chicago, home to the chain’s iconic flagship restaurant – and home to one of the country’s most influential biometric data privacy laws. The company is embroiled in a lawsuit alleging it failed to notify customers that it would collect and use their voiceprint biometric data.

As for McD Tech Labs, the division appears to have been eager to grow its engineering and AI staff until just before it was sold. In fact, several ads for McD Tech Labs positions remain on the company’s careers site, including one for software engineers skilled in natural language processing to help develop its “in-store AI Drive Through conversational agent stack.” According to the job description, McD Tech Labs is “focused on using state-of-the-art Machine Learning, AI, and related technologies along with McDonald’s unparalleled scale to completely transform the customer experience!”

Correction: An earlier version of this story misstated the month of the McD Tech Labs sale. This story was updated on Dec. 22, 2021.

Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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