US telco firm Lumen navigates digital transformation, AI with Microsoft

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Microsoft (NASDAQ: MSFT) has announced a partnership with Lumen Technologies (NASDAQ: LUMN), a move designed to improve both entities’ performance in the face of stiff competition from industry rivals.

According to an official statement, the arrangement will see Lumen leverage Microsoft Cloud to drive its digital transformation. Lumen will lean on Azure and Microsoft’s expansive AI offerings to optimize operations and create new solutions for its growing customer base.

Kate Johnson, CEO of Lumen Technologies, disclosed that the partnership is expected to improve the company’s cash flow by up to $20 million over the next year, but the firm is enthusiastic at the prospects of improving customers’ experience.

The arrangement is not a one-sided affair, and Microsoft is expected to reap its share of benefits. By teaming up with Lumen, Microsoft says it will be able to meet the skyrocketing demands on its data centers stemming from the rapid adoption of generative artificial intelligence (AI).

“We are committed to partnering with Lumen to help deliver on their transformation goals, reimagine cloud connectivity and AI synergies, drive business growth, and help customers achieve more,” said Microsoft.

In April, Microsoft disclosed that a dearth of infrastructure currently hinders its ambitions to roll out advanced AI models for consumers. With its data centers under pressure from rising users and their demands for computational power, the company’s executives said that a partnership with Lumen is the best option available.

Under the agreement, Lumen will take on the role of Microsoft’s chief network infrastructure supplier, with the Redmond company also keen on integrating Lumen’s Private Connectivity Fabric. The fabric, a custom network, is a state-of-the-art AI infrastructure capable of improving the performance and speed of Microsoft’s data centers.

“Microsoft has an ambitious vision for AI and this level of innovation requires a network that can make it a reality,” said Johnson. “Lumen’s expansive network meets this challenge, with unique routes, unmatched coverage, and a digital platform built to give companies the flexibility, access, and security they need to create an AI-enabled world.”

Stiffening competition in the space

Since AI became mainstream, competition in the industry has soared to frenetic levels, with Google (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN) and Microsoft tied in a three-horse race for cloud dominance. Microsoft may have gained a small advantage given its recent spree of high-profile investments across Southeast Asia and Europe.

Amazon and Google, keen on gaining an advantage with emerging technologies, hint at developing new data centers globally. For Amazon, the company says its grit and innovation are sufficient tailwinds to enable it to meet the rising demands of its clients as it netted its highest quarterly operating profit buoyed by generative AI.

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