Vodafone has signed a 10-year, billion-pound deal with Microsoft that will see the telecoms firm use Microsoft’s generative AI, digital and cloud services.

The deal will see Vodafone invest 1.5 billion dollars (£1.2 billion) over the next 10 years in customer-facing generative AI using Microsoft’s technologies, as well as digitise its data centres using the US firm’s Azure cloud platform.

It will see the latest generative AI technology used to create chatbots to be used across Vodafone customer services, the companies said.

In announcing the new partnership, Microsoft and Vodafone said the deal would help more than 300 million consumers and businesses across Europe and Africa.

As part of the deal, Microsoft will use Vodafone’s fixed and mobile connectivity services and will invest in the telecoms firm’s connected devices platform – which will become a standalone business by April 2024, the companies said.

Vodafone Group chief executive Margherita Della Valle said: “Today, Vodafone has made a bold commitment to the digital future of Europe and Africa.

“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.”

Microsoft chief executive Satya Nadella said: “This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world.

“We are delighted that together with Vodafone we will apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe, build new products and services, and accelerate the company’s transition to the cloud.”