McDonald’s Acquires Artificial Intelligence Startup to Tap Into Customers’ Taste Buds

McDonald's is investing in AI technology to encourage customers to order more.

McDonald’s is investing in AI technology to encourage customers to order more. Joe Raedle/Getty Images

Would you like fries with that?

That’s what McDonald’s is trying to figure out, by using new technology developed by a startup it just acquired.

The fast food chain, which bought the Tel Aviv-based machine learning firm Dynamic Yield for $300 million, plans to utilize their artificial intelligence (AI) algorithm for meal ordering and marketing purposes. For example, the technology will be used in drive-thru displays and mobile app interfaces to give customers a custom dining experience via item add-on suggestions.

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As McDonald’s CEO Steve Easterbrook puts it, the technology will help the company “be able to implement our vision of creating more personalized experiences for our customers.” The company began testing the technology last year, and will bring it to more locations throughout 2019.

The acquisition will also see McDonald’s join the restaurant world’s AI-powered data collection habit, giving it useful tools for insight on customers’ tastes and ordering habits. With data-based menu displays at McDonald’s locations, diners could be enticed to add on more food based on their existing order. This is not only a smart strategy for selling larger orders on the spot, but could also prove as a way to retain existing customers looking to try new items.

This isn’t McDonald’s first dabble in technology utilization. The restaurant chain has been one of the earliest adopters of mobile payments at its registers and recently became available on UberEats and Postmates. Its chains also allow customers to skip waiting in line, and instead use digital kiosks located in the dining area to place and pick up orders.

The Dynamic Yield acquisition is the latest investment by the food industry in the race to acquire new, digital-savvy customers. As younger diners look for more ways to order their meals, traditional fast food chains like McDonald’s will continue looking for ways to attract them—whether through on-demand delivery apps or algorithm-based taste bud data mining.

McDonald’s Acquires Artificial Intelligence Startup to Tap Into Customers’ Taste Buds