Vodafone signs $1.5 billion Microsoft deal for AI, cloud and IoT

Vodafone signs $1.5 billion Microsoft deal for AI, cloud and IoT

Vodafone has agreed a 10-year partnership with Microsoft to bring generative AI, digital, enterprise and cloud services to more than 300 million businesses and consumers across its European and African markets.

The British company will invest $1.5 billion in customer-focused AI developed with Microsoft's Azure OpenAI and Copilot technologies, it said, and will replace physical data centres with cheaper and scalable Azure cloud services.

Microsoft will in turn become an equity investor in Vodafone's managed IoT (Internet of Things) platform when it is spun out as a standalone business by April 2024, and help scale Vodafone's mobile financial platform in Africa.

Vodafone's Chief Financial Officer Luka Mucic said Microsoft's leadership in AI, underpinned by its OpenAI partnership, would transform the telco's customer services.

"That's the part that is really going to catch each and every one of our customers," he said on Tuesday, adding that a Microsoft AI-underpinned TOBi chatbot would provide more consistent and intelligent responses to queries.

Microsoft's Chief Commercial Officer Judson Althoff said Vodafone's strength in IoT and financial services were strategically important.

"The IoT assets are critical in helping us address the sustainability needs of so many of our customers in hard-to-abate sectors," he said.

Microsoft deploys "digital twins" to model manufacturing environments so that process improvements can be tested in the cloud.

"Vodafone's IoT stack allows us to go into those environments, model the environment, create large-scale data stores, and use AI to help customers meet their sustainability goals," he said.

Vodafone's M-PESA mobile money platform, which operates in Kenya, Tanzania, South Africa and other African countries, shared the same objectives as Microsoft in the region, such as building digital literacy.

"We are excited to bring generative AI capabilities to help customers make more intelligent financial decisions," he said.