Apple (kind of) Wants to Be Your Bank: Apple announced this week that it is ending its Pay Later program, just a year after its launch. The program allowed users to split purchases between $50 and $1,000 into six weekly installments with no interest through Apple Pay. This initiative aimed to broaden Apple's financial service offerings and deepen consumer integration. All Pay Later loans were backed by Apple and facilitated through Mastercard's network. However, Apple isn't removing the feature entirely. Instead, they plan to offer the service through other providers. To that end, they announced an expanded partnership with well-known providers like Klarna, allowing users to apply for buy-now-pay-later financing when checking out with Apple Pay. This appears to be a strategic move. Companies like Klarna have become well-established and trusted by consumers over the past few years. By partnering with them, Apple can continue to integrate financial services into users' lives while shifting some of the financial burdens. Apple remains focused on making your phone the go-to for everything, and this is just a refinement in its approach.
AI Drive-Through Challenges: McDonald's announced this week that it is ending its partnership with IBM on advanced AI drive-through ordering systems. This partnership, which began in 2021, aimed to use an AI assistant to handle drive-through orders. The system will be shut down no later than July 26. Despite showing some promise, the system faced challenges, particularly in handling different accents and speech patterns, leading to inaccuracies in orders. However, McDonald's appears to be shifting its strategy rather than abandoning the program entirely. The company remains committed to developing this technology and believes it can achieve the minimum 95% order accuracy threshold required to make it a viable alternative.
McDonald's announced a new partnership with Google Cloud at its investor day in December, and it seems likely this partnership could expand to include Google's more advanced AI offerings. This shift is noteworthy as it highlights the early stages of major players like Google and OpenAI demonstrating their significant advantages in the AI race. Companies like McDonald's, which are trying to address rising costs and wages, will seek to work with the most advanced and capable AI solutions, likely narrowing the field to a few market leaders. The AI race demands enormous capital and resources, with only a few able to compete at this level. It will be fascinating to watch how this industry evolves as more companies decide whether to develop resources in-house or partner with leaders like OpenAI (and by extension Microsoft) and Google.
Back on Capitol Hill: Boeing's CEO David Calhoun faced intense scrutiny from a Senate panel this week regarding the company's ongoing safety and quality issues, which have resurfaced in the wake of the Alaska Airlines door plug incident. In a rare bipartisan display, lawmakers from both sides questioned Boeing's commitment to quality versus profits. While Senate hearings often serve more as political theater than producing substantive outcomes, this session underscores Boeing's significant publicity challenges. The company is now perceived as the antagonist by many Americans, and politicians are capitalizing on this sentiment.
The scrutiny on Boeing is unlikely to diminish anytime soon. A critical upcoming challenge is naming Calhoun's successor, as he is set to step down at the end of the year. This decision is seen as a pivotal moment, with the new CEO inheriting the formidable task of restoring Boeing's damaged public image and steering the company back on course. Reports suggest Boeing is struggling to find a willing candidate for the role, indicating the gravity of the situation. The next few months will be crucial for the company's future direction.
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