Coca-Cola to spend $1.1B to use Microsoft’s cloud, AI services

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Dive Brief:

• Coca-Cola signed a $1.1 billion five-year deal with Microsoft to use the technology company’s cloud computing and artificial intelligence services.
• Coca-Cola has been innovating with generative AI for nearly a year and has turned to Microsoft’s Azure OpenAI Service for its marketing, manufacturing and supply chain. The beverage giant said it is exploring the use of AI to improve customer experiences, streamline operations, foster innovation, improve its competitive advantage, boost efficiency and discover growth opportunities.
• Coca-Cola previously signed a five-year deal in 2020 for $250 million to use Microsoft’s cloud and business software.

Dive Insight:

As food and beverage manufacturers incorporate artificial intelligence into more facets of their operations to give them an advantage in the marketplace, they are spending big money to have access to the latest technology. Microsoft and Coca-Cola joined together four years ago, but since then the capabilities of AI have grown exponentially — a big reason why Coca-Cola is committing to spend nearly five times more than it did the first time. 

“This new agreement builds on the success of Coca-Cola’s partnership strategy with Microsoft, showing our commitment to ongoing digital transformation,” John Murphy, president and chief financial officer at Coca-Cola, said in a statement.

In 2023, Coca-Cola named Pratik Thakar as its global head of generative AI. The Sprite, Diet Coke and BodyArmor maker is using AI as a tool to connect with consumers. Last year, it launched Coca-Cola Y3000, a beverage the company said is the first flavor co-created with humans and AI. It also has used the technology to launch several experiential marketing campaigns. Coca-Cola is not the only company utilizing AI. Mars, AB InBev and McCormick & Co. also are incorporating it into their operations.