Coca-Cola and Microsoft Sign $1.1Bn Deal to Transform Business with AI

Coca-Cola has started using AI services from Microsoft, as evidenced by the company’s $1.1 billion five–year deal with Microsoft to use its cloud computing and artificial intelligence services.  Coca-Cola has recently started experimenting with generative AI for its marketing, manufacturing, and supply chain. And, with this strategic partnership, Coca-Cola is exploring an opportunity to leverage AI to improve customer experience, streamline operations, and foster innovation.

Coca-Cola’s announcement to invest $1.1 billion in Microsoft, is redirected by its focus on global AI transformation over the next five years. The expansion includes the use of Microsoft's generative AI technology in various areas of Coca-Cola's business such as marketing, workflows and internal management, customer service, sales, and more. This partnership aims to enhance Coca-Cola's marketing efforts while improving business operations and exploring new capabilities using AI.

Timeline of Coca-Cola and Microsoft’s Partnership

The partnership between Coca-Cola and Microsoft began in April 2020, Coca-Cola entered into a $250 million five-year deal with Microsoft to leverage its software and cloud products including Azure, Dynamic 365, and Microsoft 365 to streamline its operations. That partnership replaced the disparate and fragmented systems and provided a new approach to data across the enterprise. It also facilitated remote work for Coca-Cola employees worldwide by providing access to Dynamic 365 Customer Service, the Power Platform, and Microsoft Teams to all its employees at that time. The employees were enabled to connect and collaborate with instant chats, calls, meetings, and sharing of documents in a single hub.

Furthermore, in 2023, Coca-Cola named Pratik Thakar as its Global Head of Generative AI, and since then the company has been using AI as a tool to connect with its customers.

Last year, the company also launched Coca-Cola Y3000, a first-of-its-kind beverage, whose flavor was co-created by humans and AI.

How will Coca-Cola utilize Microsoft's AI services for its business model?

Coca-Cola may utilize Microsoft's AI services to improve its business operations in multiple ways.

Firstly, the company can use Dynamic 365 Customer Service, Microsoft's Power Platform, and Microsoft Teams to gain insights into customer satisfaction and better communication between employees.

Coca-Cola can use Azure as its cloud platform to gain new insights from data across the enterprise. Its capabilities will enable it to modernize the way how the company engages with its employees and customers, ultimately creating effective business operations.

The utilization of Dynamic 365 dashboards with AI capabilities. These dashboards provide real-time insights into customer satisfaction and allow Coca-Cola to address issues swiftly.

Finally, Coca-Cola is exploring the use of Azure OpenAI Services to leverage generative AI technology for marketing and consumer experiences, as well as for improving business operations and capabilities.

In the past, Coca-Cola has already conducted a pilot using a platform that combines GPT-4 and DALL-E to generate original artwork using assets from Coke's archives and plans to utilize AI technology in the areas of marketing, customer services, and sales. 

Conclusion

Coca-Cola has been leveraging Microsoft services since 2020, keeping its focus on improving customer experiences, streamlining operations, and fostering innovation. While extending the partnership in 2023 to include Microsoft’s full suite of tools, the partnership has continued to evolve with a focus on cloud and generative AI initiatives in April 2024.

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