International Business Machines Corporation (NYSE:IBM) shares are trading lower following reports suggesting that Starbucks is developing its own tools to reduce reliance on the company’s software.
- IBM shares are trending lower. What’s the outlook for IBM shares?
Starbucks Turns to AI to Replace Vendor Software
According to Bloomberg, Starbucks is building in-house AI-powered alternatives to software it currently purchases from IBM and Microsoft. An internal presentation reviewed by Bloomberg shows the coffee chain is developing a replacement for an IBM tool that manages maintenance, with AI-assisted coding playing a key role in its development. Some of the Starbucks-developed software could roll out by the end of next year, pending testing results.
Starbucks spends approximately $400 million a year on software alone, and Chief Technology Officer Anand Varadarajan told workers earlier this year that there are “clear opportunities to reduce the spend in software.” The company is reviewing “every contract and service” as part of a broader effort to cut $2 billion in costs. The enterprise technology team is on track to reduce its budget by about $30 million in the fiscal year ending in late September, including cutting about $10 million in software spending.
IBM Shares Tumble
IBM Price Action: At the time of publication, IBM shares are trading 5.64% lower at $285.00, according to data from Benzinga Pro.
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