Telstra and Microsoft Expand Partnership to Boost AI Infrastructure in Australia

On August 12, 2024, Telstra and Microsoft announced a significant expansion of their strategic partnership, aimed at accelerating AI innovation and digital transformation in Australia. This collaboration combines Microsoft’s leading AI technology with Telstra’s ambitious Intercity Fibre Network project to develop the country’s AI ecosystem.

Key Points of the Partnership:

1. AI Infrastructure Expansion: Microsoft has chosen Telstra as a strategic partner to extend its AI infrastructure in Australia. This move is in response to the growing demand for AI services and capabilities across the country.
2. Intercity Fibre Network: Telstra’s new ultra-fast Intercity Fibre Network plays a crucial role in this partnership. Microsoft has signed contracts for the first routes and engaged Telstra InfraCo to enhance connectivity solutions within Australia and power more AI capabilities for its customers.
3. Copilot Deployment: Telstra is investing in 21,000 Copilot for Microsoft 365 licenses, making it the largest deployment of this generative AI service in Australia and one of the largest for any telecommunications company globally. This move aims to help Telstra employees adapt to an AI-fueled future.
4. Connectivity for AI: The partnership emphasizes the critical role of robust connectivity infrastructure in fueling AI advancements. Telstra’s CEO, Vicki Brady, highlighted that while there’s excitement around AI tools like Copilot, they require a foundational layer of secure, reliable connectivity to function effectively.
5. Intercity Fibre Network Details:

• Telstra is investing up to $1.6 billion in key fibre initiatives, including the intercity fibre network project.
• The network will stretch across Australia from east to west and north to south, including the strategic Darwin to Adelaide route.
• Currently, about 1,800 kilometers of fibre have been laid across the country.
• The project involves laying two cables: a pink express path for high-speed, long-distance connections between major capital cities, and a blue foundation path allowing for future build-out to regional areas.

6. Technical Challenges: The build involves complex operations across various challenging Australian environments, including mountain ranges, deserts, and water crossings. A recent milestone was laying approximately 1km of new intercity fibre on the floor of Sydney Harbour.
7. Economic Impact: The intercity fibre network is expected to drive growth, connectivity, and digital prosperity in Australia. It aims to move the nation’s digital capabilities from the gigabit era to the terabit era, which will be essential for AI, quantum computing, and new data center gigaplexes.
8. Telstra’s AI Transformation:

• The Copilot rollout follows successful trials where users reported saving 1-2 hours per week and improved work experiences.
• Telstra has already deployed AI tools like AskTelstra and One Sentence Summary to help frontline employees better serve customers.
• The company has established a company-wide Data & AI Academy to train employees in using AI confidently and responsibly.

9. Microsoft’s Perspective: Judson Althoff, Executive Vice President and Chief Commercial Officer at Microsoft, emphasized their commitment to empowering organizations’ AI transformation responsibly and securely. The partnership aims to enable AI transformation across Australia, enhancing employee experiences, customer engagement, and innovation.
10. Building for the Future: Telstra’s infrastructure build partners, Ventia and Fulton Hogan, are collaborating to design and construct the network efficiently and sustainably. The fibre supplier, Prysmian Australia, has co-developed state-of-the-art fibre optic cable optimized for Australia’s unique environmental conditions.
11. Global Connectivity: The intercity fibre network routes will eventually connect Australia to the world, transitioning from terrestrial fibre to Telstra’s extensive international subsea cable network. This connectivity is crucial as workforces become more distributed and demand for online education, high-definition entertainment, and AI grows.
12. Previous Collaboration: This expanded partnership builds on the strategic five-year agreement that Telstra and Microsoft announced in July 2022 to support Australia’s digital growth.

The Telstra-Microsoft partnership represents a significant step forward in Australia’s AI and digital infrastructure development. By combining Telstra’s advanced connectivity solutions with Microsoft’s AI expertise, the collaboration aims to position Australia at the forefront of the global AI revolution. This initiative not only promises to enhance business capabilities and innovation but also to contribute to a more connected, innovative, and inclusive Australia. As the project progresses, it will be interesting to observe its impact on various sectors and the overall digital landscape of the country.

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