Microsoft and Coca-Cola agree $1.1bn cloud and AI deal

Coca-Cola has signed a five-year deal with Microsoft worth $1.1 billion to utilise the company’s cloud computing and artificial intelligence services.

Microsoft said that the companies will “jointly experiment” with its Azure OpenAI Service to develop innovative generative AI use cases across various business functions, including testing how Copilot for Microsoft 365 could help improve workplace productivity.

The deal will also see the drinks manufacturer expand its use of other Microsoft software including its Salesforce competitor Dynamics 365.

The partnership expands upon the $250 million five-year deal signed by Coca-Cola in 2020 to utilise Microsoft’s cloud and business software.

Judson Althoff, executive vice president and chief commercial officer at Microsoft, said: “Through our long-term partnership, we have made significant progress to accelerate system-wide AI Transformation across The Coca-Cola Company and its network of independent bottlers worldwide.

“We are proud to support Coca-Cola as it continues to embrace the era of AI and looks to solutions like Azure OpenAI Service and Copilot for Microsoft 365 to drive innovation across every area of its business.”

Neeraj Tolmare, senior vice president and global chief information officer at Coca-Cola added that “Microsoft’s capabilities help accelerate our adoption of AI to create incremental enterprise value.”

Elsewhere, Microsoft has announced the launch of its new lightweight artificial intelligence model dubbed Phi-3-mini. The model, the first of three small language models (SLM) to be released by the company, promises “about a 10x cost difference compared to the other models out there with similar capabilities,” according toSébastien Bubeck, Microsoft’s vice president of GenAI research.