The machine can hold 600 cupcakes and was installed in front of Sprinkles' flagship store in Beverly Hills here.
A touch screen display on the machine will allow customers choose from a range of flavours, including vanilla, red velvet, chocolate marshmallow and cinnamon sugar.
"It's the concept of making sure someone can get a freshly baked cupcake at anytime," Sprinkles spokesperson Vineet Chaplot was quoted as saying by CNN. "We have a lot of customers who like to come later at night."
To the casual passerby, it looks just like a regular old cash-dispensing ATM, but a second look tells a different story. Customers flick a touch screen to get started, then up pops a menu of cupcakes, cake mixes, apparel and doggie cupcakes. Then they make a selection, swipe a credit card, and wait for the fun part.
"While the credit card is processing, you'll see a video of the actual camera on the robotic arm going and getting the cupcake that you'll receive," said Chaplot.
The robotic arm places the cupcake onto a platform, and then the dainty cardboard box is revealed at the turn of a cylinder.
"We're stocking the cupcakes day and night, so anyone that comes to get a cupcake is getting a fresh one. It's not something that's been sitting in the machine for a long time."
Sprinkles is expanding this technology to their nine locations across the country. New York, Washington DC and Chicago will see Cupcake ATMs on the streets this summer.