The Coca-Cola Company has inked a $1.1 billion agreement with Microsoft aimed at enhancing its cloud computing infrastructure and integrating the tech giant’s cutting-edge generative AI capabilities on a global level.
In their five-year “strategic partnership,” Coca-Cola and Microsoft will collaboratively explore new technologies such as Azure OpenAI Service to create “innovative generative AI applications across multiple business sectors,” as stated.
Coca-Cola has transitioned all its applications to Microsoft Azure, with the majority of its major independent bottling partners doing the same.
The beverage company has been utilizing generative AI for almost a year and has already integrated Azure OpenAI Service across various areas, spanning from marketing to manufacturing, and extending into the supply chain and beyond.
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“Through our long-term partnership, we’ve achieved notable strides in propelling systemwide AI transformation throughout The Coca-Cola Company and its global network of independent bottlers,” remarked Judson Althoff, Chief Commercial Officer at Microsoft.
“We’re delighted to assist Coca-Cola as it keeps embracing the era of AI & looks to solutions like Azure OpenAI Service & Copilot to drive innovation across all facets of its business.”
According to a statement released on April 23, the owner of Sprite is exploring the utilization of generative AI-driven digital assistants through Azure OpenAI Service. Their aim is to enhance customer experiences and optimize operational efficiency for employees.
“This new agreement further underscores Coca-Cola’s dedication to continuous digital transformation, building upon the successful partnership strategy with Microsoft,” stated John Murphy, CFO of The Coca-Cola Company.
In 2020, the company entered a five-year agreement valued at $250 million to utilize Microsoft’s cloud infrastructure and business software solutions.
Josep Bori, research director at GlobalData, commented, “This represents a classic move in the technology realm, where a major player leverages its dominant position in one product or service to support a nascent offering. Microsoft has previously employed this strategy with products like its Internet browser, media player, and even its cloud computing services.”
“Microsoft has made a significant investment in OpenAI technology and is currently exploring avenues to monetize it. Leveraging key customers like Coca-Cola to explore potential applications from both a technological and marketing standpoint seems like the right approach. For example, if Coca-Cola decides to adopt CoPilot for Microsoft 365 internally after successful testing, it would serve as a strong reference for future sales opportunities.”
Meanwhile, Coca-Cola HBC, a prominent bottler operating across 29 countries in Europe and Africa in partnership with The Coca-Cola Company, has recently been focused on optimizing its operations and enhancing sustainability by investing in technology.
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In a recent interview, Mourad Ajarti, the Chief Digital and Technology Officer, elaborated on the company’s collaboration with Microsoft and its utilization of digital twins technology.
He mentioned, “We’re currently implementing a plan to expand into 50 or more product lines by 2027, applying the same digital twin and AI technology across each line.”
“We’re addressing energy efficiency, water efficiency, and changeover efficiency, aiming not only to boost productivity operationally but also to enhance sustainability by reducing energy and water consumption.”