Starbucks, a coffee chain, NASDAQ:SBUX is developing AI-assisted in-house software that could replace some applications it currently buys from Microsoft, a software company whose system tracks inventory for Starbucks, NASDAQ:MSFT and IBM NYSE:IBM, a technology company whose tool manages Starbucks maintenance workflows, according to an internal presentation reviewed by Bloomberg News.
The effort suggests Starbucks may be using AI to rethink its reliance on outside software vendors, a shift that investors may view as part of a broader cost-control push. Chief Technology Officer Anand Varadarajan told employees earlier this year that Starbucks spends about $400 million annually on software and sees opportunities to reduce that spending, while the company is also reviewing every contract and service as part of its technology budget discipline.
For Starbucks investors, the initiative could support the company's broader $2 billion cost-cutting turnaround plan, though execution risks remain. Some internally built software could roll out by the end of next year if testing supports it, while Starbucks' enterprise technology team is on track to cut its budget by about $30 million in the fiscal year ending in late September, including about $10 million from software spending.