Fast-Food Chains Bet Big on AI, Despite Past Stumbles
Major players in the quick-service restaurant (QSR) industry, including McDonald’s, Yum! Brands (the parent company of KFC, Taco Bell, and Pizza Hut), and Wendy’s, are significantly increasing their investments in artificial intelligence (AI) and automation. The goal is to optimize operations, boost profits, and improve the customer experience. This push comes even after encountering some early difficulties in deploying the technology.
McDonald’s Chairman and CEO Chris Kempczinski identified AI adoption as one of the top three trends for the QSR sector in 2025, alongside focusing on proteins and sauces. “Everybody’s talking about AI, and AI certainly has a lot of applications in our business,” he shared on social media. “We’ve got a number of teams looking at how we can use AI to deliver an even better experience for our customers and even better experience for our crew members.”
According to a December survey conducted by TD Bank, 42% of restaurant operators and financiers believe AI and automation will have the most significant impact on the restaurant industry in 2025, second only to lower interest rates (46%).
McDonald’s is overhauling its technology infrastructure, including connecting kitchen equipment to the internet, rolling out AI-powered drive-through systems, and providing AI tools for its managers. Brian Rice, McDonald’s CIO, told The Wall Street Journal that sensors on kitchen appliances will feed data into its on-site edge computing system. This will give franchisees a real-time overview of their operations. The company is also considering using computer vision with in-store cameras to ensure order accuracy before handing food to customers. Moreover, McDonald’s is exploring the creation of a “generative AI virtual manager” to handle administrative tasks like scheduling.
Learning from Past Mistakes
McDonald’s plans to re-launch an AI voice-ordering system at its drive-throughs. This time, the company is collaborating with Google Cloud. A prior agreement with IBM failed after the system often generated inaccurate orders, leading to incidents like incorrect or weird food orders.
Wendy’s, too, faced initial challenges with its AI system. Some customers reported that the technology struggled to understand them. However, Wendy’s CEO Kirk Tanner has noted improvements during recent earnings calls. During the test runs, the AI shows improved understanding and is getting more accurate.
Other Chains Implement AI
Yum! Brands announced an integrated AI-driven platform called ‘Byte by Yum!’ that would be rolled out across its global locations. The platform is designed to optimize restaurant processes, improve order accuracy, and increase customer satisfaction. Byte uses AI to enhance online and mobile ordering, point-of-sale systems, kitchen and delivery optimization, labor management, and team member training. The system is already in use at approximately 25,000 international locations.
Wendy’s is expanding its AI-powered drive-thru ordering system, FreshAI, from 100 to 500-600 locations in 2025. Tanner explained that the technology increased the average customer spend, as the AI suggests additional items to order. Higher labor efficiency also added 80 basis points to company-operated restaurant margins globally compared to last year. This plan is part of a broader digital transformation at Wendy’s, including digital menu boards, AI-driven kiosks, and backend automation.
“Restaurants are leveraging AI and automation to enhance operations and elevate guest and employee experiences,” said Anup Prasad, Senior Vice President and head of the Consumer Business unit at Cognizant, a global IT services company that recently expanded its partnership with McDonald’s. “These technologies are pivotal for improving forecasting, addressing labor challenges, optimizing supply chain tracking, enhancing food safety, and reducing waste through better demand forecasting,” Prasad told PYMNTS.
Sam Jones, a partner at Torch Capital, predicts that fast-food chains have “significant” opportunities to streamline operations, reduce overhead costs, and enhance customer experiences through AI. He envisions a future where apps and kiosks will function more like “personal assistants, suggesting exactly what you want before you even ask, derived from previous orders, dietary restrictions, and real-time factors like time of day” and other data. Jones emphasized however that most companies are still assessing where in their value chain AI can make the biggest difference.
