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Vodafone (VOD.L) has entered into a decade-long collaboration with Microsoft (MSFT.O) to extend generative AI, digital, enterprise, and cloud offerings to over 300 million businesses and consumers in its European and African markets. The British telecommunications company will allocate a $1.5 billion investment to develop customer-centric AI using Microsoft's Azure OpenAI and Copilot technologies, with a strategic shift to replace physical data centers with cost-effective and scalable Azure cloud services.
As part of the agreement, Microsoft will become an equity investor in Vodafone's managed IoT (Internet of Things) platform, set to operate as a standalone business by April. Microsoft will also contribute to the expansion of Vodafone's mobile financial platform in Africa.
Vodafone's CEO, Margherita Della Valle, facing pressure to restore profit growth, sees an opportunity to assist businesses in digitization. Noting the market's value at 140 billion euros in May, she expressed confidence that the deal, signed with Microsoft's Chairman and CEO Satya Nadella, would expedite the digital transformation for business customers, especially small and medium-sized enterprises.
Vodafone's Chief Financial Officer, Luka Mucic, highlighted Microsoft's AI leadership, particularly through its OpenAI partnership, as a catalyst for transforming the telecommunications company's customer services. Music emphasized the potential impact on customers, stating that Microsoft's AI-backed TOBi chatbot would offer more consistent and intelligent responses to queries.
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