Starbucks Abandons Borked AI Inventory Tool That Couldn't Count

Starbucks has scrapped an AI-powered inventory tool after nine months due to frequent miscounting and mislabeling of items, according to an internal newsletter obtained by Reuters. The system, provided by NomadGo and touted as having 99% accuracy, was part of CEO Brian Niccol's effort to address inventory shortages but instead compounded the problem. Starbucks will now revert to manual counting for beverage components and milk across its North American coffeehouses.

Starbucks has stopped using an AI-powered inventory tool after just nine months because it made the most basic of errors, according to a report from Reuters https://www.reuters.com/business/starbucks-scraps-ai-inventory-tool-across-north-america-2026-05-21/ . The news comes after other AI tools have reportedly made serious mistakes, such as the case of a Pizza Hut franchisee who sued the pizza chain’s parent company after a system meant to make things more efficient allegedly cost $100 million in lost revenue https://gizmodo.com/pizza-hut-franchisee-sues-over-ai-delivery-system-alleges-100-million-in-damages-2000760645 . “Starting today, Automated Counting will be retired,” an internal Starbucks newsletter from this week read, according to Reuters. “Beverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse.” The AI tool was reportedly an effort spearheaded by CEO Brian Niccol, who joined Starbucks from Chipotle in 2024, to address what he said were inventory shortages that were harming sales. Reached for comment, a Starbucks spokesperson told Gizmodo, “We test ideas in our coffeehouses, listen closely to partner feedback, and make changes to deliver a better, more consistent experience.” When the tool, provided by NomadGo, was first rolled out in Sept. 2025, it was billed by Chief Technology Officer Deb Hall Lefevre as a solution for automating the inventory process and generally making it more efficient. But it sounds like the opposite happened. NomadGo CEO David Greschler described it in a press release https://www.nomad-go.com/news-pr/nomadgo-transforms-inventory-counting-with-groundbreaking-on-device-inventory-ai-technology as a “unique synthesis of on-device 3D spatial intelligence, computer vision, and augmented reality.” A YouTube video https://youtu.be/HP8YZoBBFS8 from the company shows how the NomadGo Inventory AI works: The video advertises the product as having 99% accuracy. But according to Reuters, the tool was “frequently” miscounting and mislabeling items. “Since the dawn of time, inventory has been a manual, tedious, and inaccurate task. We’ve transformed it to be automated, intelligent, and fun with a company mission to count everything of value in the world. With NomadGo Inventory AI, employees can instantaneously scan a shelf filled with items in less than 30 seconds,” said Greschler. Starbucks has been testing various tools for inventory management and positioned the changes to Gizmodo as a way to deliver a consistent process across all of its stores in North America. The coffee retailer has experimented with AI tools like Green Dot Assist https://about.starbucks.com/press/2025/meet-green-dot-assist-starbucks-generative-ai-powered-coffeehouse-companion/ , a virtual assistant aimed at helping in-store staff, like baristas, who need to remember the ingredients for a seasonal beverage that may be new. The company also touts a technology called Smart Queue https://about.starbucks.com/press/2026/supporting-the-moments-that-matter-with-artificial-intelligence/ , which it says “intelligently sequences orders across café, drive thru, mobile and delivery.” And it has tested a customer-facing ChatGPT-powered app https://about.starbucks.com/stories/2026/meet-the-beta-starbucks-app-in-chatgpt-a-new-way-to-discover-your-next-favorite-drink/ that gives recommendations on what to order. The app was launched on April 15, though it’s so far unclear how many people are actually asking ChatGPT for drink recommendations. “We’ve enhanced discovery in the Starbucks app with a trending beverage category and a secret menu, harnessing the power of customization that occurs every day in social media and with our baristas,” the company said in announcing the app. “And now, in ChatGPT, we are using AI to support something very human: helping you discover a drink you’ll love.” NomadGo didn’t respond to emailed questions about the report from Reuters but told the news outlet it was “continuously learning from customer and user feedback.” Gizmodo will update this article if we hear back.