Vodafone strikes billion-dollar AI deal with Microsoft

16 Jan 2024

From left: Margherita Della Valle and Satya Nadella. Image: Microsoft

Microsoft will invest in Vodafone’s managed IoT connectivity platform, which is set to become a separate, standalone business by April 2024.

Vodafone has signed a 10-year deal with Microsoft to infuse its services with generative AI and bring the technology to more than 300m businesses and consumers.

The $1.5bn investment by Vodafone will see the telco giant collaborate with Microsoft, one of the leaders in generative AI development, across several areas such as scaling its Internet of Things (IoT) platform and bringing new services to SMEs in Europe and Africa.

“This unique strategic partnership with Microsoft will accelerate the digital transformation of our business customers, particularly small and medium-sized companies, and step up the quality of customer experience for consumers,” said Vodafone group CEO Margherita Della Valle.

As part of the deal announced yesterday (15 January), Vodafone will use Microsoft AI technologies to deliver personalised experiences across the telecom company’s customer services, including a digital assistant called TOBi.

Vodafone employees will also use Microsoft Copilot to boost productivity and improve digital efficiency.

“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world,” said Satya Nadella, CEO and chair of Microsoft.

“We are delighted that together with Vodafone we will apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe, build new products and services, and accelerate the company’s transition to the cloud.”

Microsoft said it will use Vodafone’s fixed and mobile connectivity services and invest in the company’s managed IoT connectivity platform, which is set to become a separate, standalone business by April.

Microsoft has been investing heavily in AI in recent years, including its significant backing of generative AI pioneer OpenAI and, most recently, its own custom silicon chips to take on Nvidia.

This week, Microsoft briefly became the world’s most valuable company by overtaking Apple, thanks in part to its investment in AI, the demand for which has been growing steadily as the tech becomes pervasive.

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Vish Gain is a journalist with Silicon Republic