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Starbucks is developing its own artificial intelligence-based software, with the goal of replacing some of the corporate applications it currently licenses from Microsoft and IBM. This move is yet another attempt by the world-famous coffee chain to optimize its technology spending and modernize its internal operational processes using AI.
According to materials from an internal corporate presentation reviewed by Bloomberg, Starbucks is developing its own alternative solutions to replace Microsoft’s inventory management system and IBM’s maintenance platform. Company executives believe that using AI will significantly accelerate software development while reducing financial dependence on third-party business software providers.
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Chief Technology Officer Anand Varadarajan told his team that Starbucks’ annual budget for software purchases is approximately $400 million. He sees significant potential to reduce these expenses by transitioning to in-house tools developed with AI support. This initiative is part of a broader cost-reduction strategy being implemented by CEO Brian Niccol to stabilize and grow the business.
The in-house software is intended to automate workflows currently handled by commercial software, including inventory tracking and equipment maintenance. If the testing period is successful, the first AI-integrated applications will begin to be rolled out toward the end of 2027.
This strategy reflects a general trend in the U.S. corporate market, where major players are increasingly using generative AI not only to boost employee productivity but also to move away from expensive third-party software subscriptions in favor of unique in-house systems.
These steps are being taken despite the fact that Starbucks has already had a mixed experience with AI. Earlier this year, the company was forced to discontinue its Automated Counting system in North America. The decision was made after it became clear that the technology was producing inaccurate inventory counts and failing to deliver consistent improvements to workflows. This AI tool, developed in collaboration with the Seattle-based startup NomadGo, was shut down less than a year after its launch.
At the same time, Starbucks continues to scale up other AI projects. For example, the virtual assistant Green Dot Assist, developed on Microsoft’s Azure OpenAI platform, is currently undergoing testing. It helps baristas quickly find drink recipes, troubleshoot equipment issues, and select alternative ingredients, while also helping store managers optimize staff schedules. The company specifically emphasizes that this chatbot was created to support employees, not to replace or lay them off.
As part of the “Back to Starbucks” transformation plan initiated by Niccol, the company has focused on improving operational efficiency, streamlining internal processes in coffee shops, and minimizing expenses. Developing proprietary AI software could enable Starbucks to tailor applications to its specific business needs and significantly reduce long-term licensing costs.
This approach highlights a new trend among large corporations seeking to leverage generative AI to design custom business software. This has the potential to weaken the positions of tech industry giants such as Microsoft, IBM, and Oracle. If Starbucks’ experiment proves successful, its experience could serve as a model for other retailers seeking to combine AI innovation with cost savings.
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