Vodafone and Microsoft have announced a ten-year partnership worth $1.5bn to bring generative AI (GenAI), digital, enterprise and cloud services to over 300 businesses and public sector organisations across Europe and Africa. 

The British multinational telecoms company will use the $1.5bn, spread out over ten years, to replace its physical data centers with Microsoft’s Azure cloud services. 

Vodafone will also invest in customer-focused AI developed in conjunction with Azure OpenAI and Copilot technology. 

The companies said that they will use the latest GenAI technology to increase customer satisfaction, as well as transform working practises for staff to boost their efficiency.

All of the AI technology used will be built on unbiased and ethical privacy and security policies under Vodafone’s established framework for responsible AI.

“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 Margherita Della Valle, Vodafone Group chief executive.

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

Microsoft, a majority investor in ChatGPT-maker OpenAI, also said it will invest in Vodafone’s IoT connectivity platform, which will see it become a separate business by April 2024. 

Research company GlobalData describes the internet of things (IoT) as the use of connected sensors and actuators to control and monitor the environment, the things that move within it, and the people that act within it. 

The standalone IoT platform currently connects around 175 million devices and platforms around the world.

The new company will be used to attract partners and consumers, while expanding the platform to connect more devices and machines. 

Microsoft also confirmed it will be using Vodafone’s fixed and mobile connectivity services. 

GlobalData forecasts that the global IoT market will reach $1.7trn in
revenue by 2027, according to its Thematic Research: IoT 2023 report.

Enterprise IoT will account for 73% of market revenue by 2027, up from 70% in 2022, while the consumer segment will make up 27% in 2027, down from 30% in 2022, according to the report.