Starbucks Retires AI Inventory Tool After Nine Months
May 22, 2026 – 2:54 pm
The coffee chain has reverted to manual counts across North America, ending CEO Brian Niccol’s AI innovation. This follows the tool’s struggle to differentiate between similar milk types, such as oat milk and dairy.
Starbucks announced in an internal newsletter (reviewed by Reuters) that they are retiring their AI-powered inventory management system introduced last September. The tool, developed by NomadGo, used cameras and LiDAR technology to automatically scan and count beverage components on shelves.
"Starting today, Automated Counting will be retired," stated the Monday memo. Beverages like milk will now be counted manually, just like other inventory categories.
The tool was part of Niccol’s "Back to Starbucks" turnaround strategy after several years in development. However, its miscounting and mislabeling issues, particularly with similar-looking products, led to the decision to abandon it.
Starbucks’ statement to Reuters framed the move as a standardization effort:
"The decision came from… a decision to standardize how inventory is counted across coffeehouses…"
An internal note from the company expressed gratitude for the team’s efforts and acknowledged the challenges: "The thought behind it was great, but the execution was proving difficult."
This decision comes as the wider record on enterprise AI pilots shows mixed results. MIT’s NANDA initiative found that most such projects deliver little to no measurable impact on profitability despite significant investment.