Starbucks Plans In-House AI to Cut $400M Software Spend
SBUX•Starbucks is developing proprietary AI-based tools to replace Microsoft’s inventory-tracking system and IBM’s maintenance-management software, with some modules expected to launch by late 2027 after internal testing. The initiative aims to cut the company’s $400 million annual software spend as part of a broader $2 billion cost-reduction program.
1. AI Software Development
Starbucks is building AI-driven platforms to replace its existing Microsoft inventory-tracking system and IBM maintenance-management tool, leveraging AI-assisted coding to accelerate development. The company expects initial modules to complete testing and launch by the end of 2027, subject to performance and reliability benchmarks.
2. Cost Reduction Initiative
This AI project is a key element of Starbucks’ broader plan to cut $2 billion in costs, targeting a $400 million annual software budget. For the fiscal year ending September, the enterprise technology team aims to reduce spending by about $30 million, including $10 million saved on software licenses and $13 million through reduced contractor services.
3. Organizational and Workforce Changes
To support the internal development push, Starbucks is consolidating tech roles into new offices in Nashville and India while maintaining a core team at its Seattle headquarters. Since February 2025, the company has eliminated roughly 2,300 jobs and continues reviewing technology contracts to drive further efficiencies.
