SAN ANTONIO, Texas, March 16 (Reuters) - When McDonald's

first opened for business in the 1940s, its workers

stood at physical counters, its burgers and fries were listed on

paper menus, and its customers paid cash to its human cashiers.

How quaint.

Today technology so infuses every aspect of McDonald's

business that it would only be a slight exaggeration to call it

a tech company that happens to sell burgers.

McDonald's mobile app; its human-less, order-taking kiosks;

its digitized menus that change based on trends, the weather and

more; and even its generative AI - together, these enable

McDonald's to eke out additional sales and efficiencies worth

billions of dollars to the company, which has 40,000 locations

in roughly 100 countries.

Yet that same tech can also bring McDonald's to its knees.

On Friday, system outages plagued McDonald's locations

across some of its biggest global markets, including Japan,

Australia and the United Kingdom, forcing many stores to

temporarily take only cash or shut down entirely. McDonald's

hasn't disclosed how widespread the outages were, but on Friday

afternoon, 12 hours after the outages were first reported, a

franchise in San Antonio, Texas wouldn't accept orders in its

app and couldn't accept cash.

McDonald's said in a statement the outage was caused by an

unnamed third-party provider during a "configuration change".

Asked for comment, McDonald's referred to that statement.

McDonald's Japan on Saturday apologized for the

inconvenience, saying all its restaurants and its delivery

service were operating normally.

The burger giant did flag that something like this could

happen, at least to Wall Street.

"We are increasingly reliant upon technology systems,"

company lawyers wrote in its annual Securities and Exchange

Commission filing on Feb. 22. "Any failure or interruption of

these systems could significantly impact our or our franchisees'

operations, or our customers' experiences and perceptions."

Even AI gets a warning in the filing, which states that "the

artificial intelligence tools we are incorporating into certain

aspects of our restaurant operations may not generate the

intended efficiencies and may impact our business results."

Yet Friday's widespread outage is unlikely to bump

McDonald's out of its long-term strategy to deepen its reliance

on tech.

McDonald's wants more customers to order through digital

avenues like its app and kiosks, which already made up a third

of its sales in top markets in 2022.

In December McDonald's announced a partnership with Google

to move restaurant computer systems into the cloud, where the

global scale of data will allow McDonald's generative AI system

to "better understand the broadest range of patterns and

nuances," resulting in what McDonald's at the time said would be

"hotter, fresher food." Generative AI already powers much of the

restaurant operations and personalized pitches made from

internal profiles of customers.

It's not just McDonald's. Tech is the strategy du jour of

virtually every major fast food chain.

Starbucks ( SBUX ) in 2019 announced its own internal AI

platform, called "Deep Brew," which then-CEO Kevin Johnson said

would increasingly power its personalized offers, store staffing

and inventory management.

"Over the next 10 years, we want to be as good at AI as the

tech giants," Johnson told a retail conference in 2020,

according to Retail Dive, a trade publication. Starbucks ( SBUX ) in 2022

hired a former McDonald's executive to oversee its use of

technology.

Risks from this new technology don't just come from system

outages.

Wendy's got public backlash after its CEO said

during an earnings call in mid-February that the chain would

soon use "dynamic pricing" on its digital signs - yet another

technology that would not have been possible before the age of

information.

The chain later clarified that it did not intend to use

digital signs to implement "surge pricing" that could let it

charge higher prices during busy times. Rather, Wendy's said,

its CEO's remarks referred to its plan to offer discounts to

patrons during slow parts of the day.