💵 Telstra Bets Big On AI

Hey Superheroes,

It’s been a busy start to the year. Australia’s labour market smashed expectations with 56,300 new jobs added in December while core inflation in the United States eased for the first time in six months. Both sets of results indicate that we might have to wait a bit longer before either the US Fed or RBA deliver a rate cut. 

Meanwhile, Telstra (ASX:TLS) is taking centre stage with a massive investment that has industry insiders and investors on the edge of their seats.

Let’s break down the story of the week.

Telstra Leaps into AI with $700M Bet in a Joint Venture with Accenture

2025 is shaping up to be the year of AI and Telstra’s not holding back. Australia’s largest telco has announced a $700 million, 7-year partnership with consulting firm Accenture (NYSE:ACN) to supercharge its AI capabilities. This marks one of the most significant AI technology rollouts ever undertaken by a major Australian company.

Under the agreement, Telstra will invest $100 million annually, while Accenture will own a controlling 60% stake in the new joint venture.

If you’ve been wondering how AI will impact your daily life or your data bill, this deal might hold some clues. 

😲 A World Without Outages?

Telstra is aiming to roll out AI solutions across its operations and customer services. Think smarter networks, seamless operations and potentially a new era of customer interactions.

The company has been working with Accenture for years, deploying AI to streamline billing systems, handle customer queries and assist employees.

However, this $700M joint venture takes things to the next level. Telstra’s vision of becoming an “AI-fuelled organisation” is expanding beyond customer service to tackle bigger challenges.

For example, Telstra plans to use AI to anticipate and fix outages before they even happen. Imagine never having to deal with unexpected internet dropouts again — sounds pretty good, right?

💡How Did The Market React

After the announcement Telstra’s share price has held steady this week as the long term benefits of this deal are not likely to impact immediate earnings. Accenture, however, saw a 1% increase in after-market trading on Wednesday. 

If successful, it could set a new benchmark for Australian businesses looking to harness the power of AI. 

💵 Will It Pay Off?

While Telstra’s bold move has drawn applause from some corners, it’s not without risks. 

AI implementation at scale is notoriously complex and some analysts have raised concerns about whether this hefty investment will deliver the promised returns. 

Additionally, there’s the inherent risk of becoming heavily reliant on big tech.

🔦  Some other things we’re shining the Spotlight on:

MONEY MONEY MONEY: JPMorgan Chase & Co (NYSE:JPM) is proving once more why it’s the most profitable bank in U.S. history. The bank delivered a standout Q4 performance this Wednesday with revenue climbing 10% to US$43.74 billion and net interest income hitting an impressive US$23.47 billion, both smashing analyst expectations.

CHEMIST WAREHOUSE SET FOR ASX DEBUT: Chemist Warehouse is poised to shake up the ASX with its anticipated IPO, following Sigma Healthcare’s $30 billion merger. The listing could trim Commonwealth Bank’s ASX weight by 7.5 basis points to 10.5% and BHP’s to 8.09%.

SEZZLE SIZZLES: Zip Co (ASX:Z1P) jumped on Thursday, riding the coattails of competitor Sezzle’s upgraded revenue guidance. Sezzle noted the demand for Buy Now, Pay Later services was stronger during the recent holiday season.

Wall Street will be taking a break next Monday night in observance of Martin Luther King Jr. Day, so get yourself a good night’s sleep!

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