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Telecommunications companies are increasingly turning to AI tools to carry out key functions. Swisscom wants to develop and use these itself, while also offering AI services to other companies.

Whether built by OpenAI, Microsoft or Meta, most current artificial intelligence tools, like most innovations in the tech sector, originated in the U.S. tech sector. However, Swiss companies may soon be using AI applications developed in Switzerland.

On Tuesday afternoon, at the annual World Economic Forum meeting in Davos, telecommunications provider Swisscom announced a partnership with American chip manufacturer Nvidia. In so doing, Switzerland's largest communications company is venturing into new territory. In the future, it not only wants to use AI technologies, but also act as a service provider and develop solutions for its business customers.

«We believe that it could be an advantage for customers to have a Swiss alternative to the big players,» said media spokesperson Armin Schädeli. In the future, customers who want to integrate AI applications into their company will not only be able to turn to providers such as Microsoft or OpenAI, but also to Swisscom, he said.

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A customer service chatbot, software that automatically draws up contracts, an internal research tool – these are all areas in which Swisscom's services could be used in the future, Schädeli noted. The hardware Swisscom intends to use in its data centers will be supplied by Nvidia. The U.S. company will additionally provide software, as well as a network of AI specialists.

The fact that Swisscom wants to act as a provider of AI solutions may initially seem surprising. However, within the IT sector, it is the next logical step for the company. Swisscom is currently primarily active as a provider of network and cloud services, while also offering software and IT security for banks, for instance.

In working with customers, the company found that there is a demand for AI solutions «made in Switzerland,» Schädeli said. «The customer knows where their data is, how the model works and what happens to their data – because they are developing it in cooperation with Swisscom.»

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Swisscom says it plans to establish a «trusted AI factory,» where trustworthy AI can be developed. Speaking at Davos, CEO Christoph Aeschlimann said that Switzerland in particular needs this, given its many multinational organizations and companies. Data processing by large providers is often opaque and difficult for companies to understand, he said. It is thus important that employees and customers trust the underlying technology, he added.

By working with Nvidia, the company will be able to act as a bridge builder, offering solutions «with a Swiss touch,» Aeschlimann said. «As a first step, we are creating a high-performance infrastructure that we will use develop trustworthy services.»

With Nvidia, Swisscom has secured a powerful partner for this endeavor. As a manufacturer of high-performance chips, the company plays a key role in the development of AI. All major tech companies that use artificial intelligence – including Amazon, Google, Meta, Microsoft and Tesla – rely on high-performance chips to run AI-driven applications in the background. Demand for the company's expensive semiconductors far exceeds supply. Companies are so dependent on Nvidia chips that bottlenecks regularly occur.

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Swisscom is not Nvidia's only partner in Switzerland. This spring, Alps, which is expected to be world's most powerful AI-capable supercomputer, is due to go into operation at the Swiss National Supercomputing Center. It will primarily be used for research in the fields of weather, climate and, of course, AI.

Such initiatives are a great opportunity for the Swiss economy. This is because training large AI models on state-of-the-art computers is complex and expensive, and only very well-financed tech companies can afford to do so. Small and medium-sized companies that want to use voice-enabled AI services such as ChatGPT are therefore dependent on OpenAI's technology and its pricing. The company also decides how to incorporate ethical and political boundaries into its language models, and which data to include in it.

The plan is thus to use the Alps supercomputer to create an open Swiss language model that companies can use for themselves. Swisscom too is investing money and staff time in the development of AI models, as well as in the effort to build in ethical principles. Industry leaders would be well advised to think about a corresponding set of rules for their own companies, Aeschlimann said in Davos. «Because if people start using these technologies without guidance and control, the result will not only be bad, but will also harm the customer.»

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Swisscom plans to invest 100 million Swiss francs in the initiative in the coming years. The company has declined to say how much of this will go to Nvidia. Currently, around 200 AI specialists are employed at Swisscom, the company says. «We are convinced that this technology is here to stay,» Schädeli said.

It is clear that Swisscom is killing two birds with one stone with this partnership. The company also wants to develop AI solutions for its own operations, for instance for use in customer service or network monitoring functions. According to the company, artificial intelligence tools are already being used in these and other areas. The company has also developed its own Swiss-German language model in order to offer better customer service on its TV platform, for example with voice-based search functions.

Applications based on artificial intelligence increasingly widely used in the telecommunications industry. At the end of August, Deutsche Telekom subsidiary T-Mobile US announced its intention to cut 5,000 jobs in its corporate organization and replace them with AI tools. In July, Deutsche Telekom announced the Global Telco AI Alliance, a partnership with the Korean SK Telecom, the Etisalat Group from the United Arab Emirates and Singtel from Singapore. One of the aims of the cooperation, in which Meta is also involved, is to develop a large language model that will take over customer service tasks.

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Vodafone also announced a new partnership in the AI sector on Tuesday, in this case with Microsoft. Vodafone wants to use the company’s technology internally, as well as for customer service functions.

Does this mean the end of customer service by human employees? Swisscom remains cautious when addressing this subject. According to Schädeli, a chatbot could be used to deal with simple inquiries, for example. AI could also help hotline staff to obtain information more quickly on challenging topics, he added.

But this could also change soon, as the use of artificial intelligence is still in its infancy. In any case, Swisscom does not want to be left behind – and wants to get a slice of the pie for themselves, at least in this country.

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