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Vodafone and Microsoft sign $1.5bn AI deal for 10 years

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Vodafone has announced a 10-year strategic partnership with Microsoft aimed at expanding its generative AI, digital services, and cloud platforms to over 300 million businesses, public sector organizations, and consumers across Europe and Africa.

The British multinational telecommunications company plans to invest $1.5 billion in the development of cloud and customer-centric AI services in collaboration with Microsoft. In return, Microsoft will have access to Vodafone’s fixed and mobile connectivity services.

As a part of the agreement, Microsoft will also become an equity investor in Vodafone’s managed Internet of Things (IoT) connectivity platform, which is expected to operate as a separate independent business by April.

Vodafone has reported a positive start to the tenure of their new Chief Executive Margherita Della Valle, with better top-line growth driven by increased prices in the UK and improvements in Germany, Italy, and Spain.

Della Valle expressed her commitment to driving the company’s growth and emphasized the partnership with Microsoft as a “bold commitment” to the digital future of Europe and Africa. She believes that this strategic partnership will accelerate the digital transformation of Vodafone’s business customers, particularly small and medium-sized companies, and enhance the quality of customer experience for consumers.

Microsoft CEO Satya Nadella echoed this sentiment, stating that the new generation of AI will unlock significant opportunities for organizations and industries worldwide. He expressed his delight in the collaboration with Vodafone.

According to Reuters, Vodafone’s Chief Financial Officer Luka Mucic highlighted Microsoft’s expertise in AI, particularly in collaboration with OpenAI, and its potential to revolutionize the telecom company’s customer services. Mucic emphasized the impact of Microsoft’s AI technology on enhancing the TOBi chatbot’s responses to customer inquiries.

Areas of Collaboration between Microsoft and Vodafone

The partnership between the two companies focuses on five primary areas of collaboration, including leveraging generative AI to enhance customer satisfaction. This involves utilizing Microsoft Azure OpenAI to provide personalized experiences for Vodafone customers in real-time.

Vodafone also aims to become part of the Azure ecosystem, making the IoT platform accessible to developers and third-party communities through open APIs. Microsoft intends to help scale Vodafone’s mobile money service, M-Pesa, in Africa while promoting digital literacy.

Besides cloud transformation, Vodafone aims to distribute Microsoft services across businesses in Europe.

Featured Image: Mike Mozart / Canva / Vodafone

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