Microsoft, Vodafone Strike $1.5 Billion AI, Cloud Deal

Microsoft and Vodafone have struck a $1.5 billion deal over 10 years to deploy generative AI at the British telecom giant and overhaul its global cloud strategy.

Microsoft will help Vodafone transform its customer service operations with generative AI, close several data centers in a move to Azure, and develop new digital and financial services for businesses across the 300 million Vodafone clients in Europe and Africa.

Microsoft also plans to invest in Vodafone’s IoT connectivity platform, which is expected to be spun off in April. This platform will be opened to Azure customers through APIs. Meanwhile, Microsoft said it will use Vodafone’s fixed and mobile connectivity services.

The goal of deploying generative AI is to develop a “highly personalized and differentiated” omnichannel customer experience, according to Vodafone. Notably, the two companies said this service will be built on “unbiased and ethical privacy and security policies” under Vodafone’s responsible AI framework.

Specifically, Vodafone will use the Microsoft Azure OpenAI service to deliver real-time, proactive and hyperpersonalized customer experiences at Vodafone, including TOBi, its digital assistant.

Vodafone employees will have access to Microsoft’s generative AI tools to become more productive and efficient, the companies said.

Vodafone also expects to reduce costs by closing several data centers and moving to Microsoft’s cloud. Further, it will offer Microsoft’s services on its business platform, which is available to telecom clients.

Finally, Microsoft plans to help Vodafone scale M-Pesa, the largest digital payments platform in Africa, by putting it on Azure so new cloud-native applications can be launched.

This is on top of a digital literacy, skills and youth outreach program both companies announced as a social initiative to reach 100 million consumers and a million small and mid-size businesses in the continent.