Starbucks reportedly builds AI as IBM Salesforce ServiceNow shares fall
Starbucks is reportedly building its own AI software instead of relying on big names like Microsoft and IBM, and Wall Street noticed.
Shares of IBM, Salesforce, and ServiceNow all dropped in premarket trading today.
The coffee chain is hoping this DIY approach will help reduce its annual software spending of about $400 million, with a targeted cost reduction of roughly $10 million in the fiscal year ending September 2026.
Starbucks swapping 3rd-party tools for AI
By swapping out third-party tools for custom AI, Starbucks aims to speed up development and cut spending, even reviewing contracts to save an extra $10 million this year.
AI-assisted coding played an important role, and AI is making it much easier and faster.
Investors are a bit nervous, though, if Starbucks can do this, other companies might follow, which could mean less business for traditional software giants down the road.