UPDATED 23:55 EDT / MARCH 25 2019

EMERGING TECH

McDonalds acquires Israeli AI company Dynamic Yield

McDonald’s Corp. has made its largest acquisition in two decades, buying artificial intelligence company Dynamic Yield Ltd.

In a blog post Monday, the fast-food giant announced it’s buying the Israel-based firm, which specializes in personalization and decision logic. The company didn’t reveal the size of the purchase, according to sources familiar with the company, it’s in the region of $300 million.

McDonalds explained that the new technology will be used for creating personalized menus for its Drive-Thru restaurants, stating that those menus will change in relation to the weather, trending menu items and traffic conditions. The decision technology will also suggest extra items based on what the customer has already chosen.

The company said it will be the first to implement such technology at a brick-and-mortar customer-facing location. Testing of the tech in 2018 was a success, so this year customers in the U.S. can expect more bespoke menus. The technology will later roll out to restaurants all over the world.

“Technology is a critical element of our Velocity Growth Plan, enhancing the experience for our customers by providing greater convenience on their terms,” said Steve Easterbrook, chief executive of McDonald’s. “With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.”

It’s not the first time the restaurant has implemented technology for a more streamlined service. In 2018, McDonalds announced it was updating thousands of stores in the U.S. with self-service ordering kiosks. According to reports, the U.S. is actually behind Canada, Australia and parts of Europe, where the servers have been replaced by machines.

As for the backend of the restaurant, former McDonalds U.S. CEO Ed Rensi famously said in 2016 that robots would soon enough replace humans in the fast-food industry. “If you look at the robotic devices that are coming into the restaurant industry – it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries,” said Rensi.

Such comments kicked off countless articles relating to the rise of automation, and indeed, McDonalds is well-known as being one of the biggest employers in the U.S. and beyond. It’s said that one in eight Americans have worked at the company, which is perhaps one of the reasons 2020 Democratic Presidential candidate Andrew Yang is pushing for a universal basic income.

Photo: Mike Mozart/Flickr

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