Microsoft and KT signed a five-year deal focused on advancing AI services in South Korea and upgrading the operator’s infrastructure, building on a strategic partnership between announced earlier this year.

In a joint statement, they described the latest pact as a “multi-billion-dollar partnership” which includes a pledge from KT to make investments related to AI, cloud and IT, while Microsoft’s “resource commitment” centres on infrastructure and people.

Projects to be undertaken include development of customised versions of large language model ChatGPT-4o and small language models tailored to the Korean market. These are intended for use by KT itself and its enterprise customer base.

Other projects include the development and launch of secure public cloud infrastructure and related products, foundation of a joint R&D facility to promote “AI transformation” in Korea and an IT project to upgrade KT’s own infrastructure.

The operator also announced an intent to establish an “AX-specialised service company”, which it intends to use to provide “advanced Microsoft Cloud and AI expertise and solutions to the Korean market”. It then plans to expand the division to operate in other countries in Southeast Asia.

Microsoft and KT expect the various pieces of joint work to “drive AI transformation for more than 650,000 businesses and 17 million consumers across Korea”.

In June, the two companies signed a strategic partnership establishing a close cooperation in AI, cloud, and IT, with the latest move part of this tie-up.