T-Mobile is making a nine-figure bet on AI customer service

The carrier is investing $100 million in an OpenAI-powered customer-service solution.

11/5/24 2:37PM

One of the bigger questions to emerge since ChatGPT was launched two years ago is which jobs will be most quickly replaced by generative AI. Two years later, one of the front-runners appears to be customer service. This year, we’ve seen more and more stories of companies increasingly turning to AI for customer-service solutions, such as Klarna’s AI assistant handling two-thirds of its customer-service chats in February 2024. On Monday, The Information reported that T-Mobile was shelling out $100 million to OpenAI over the next three years to build out “the first intent-driven AI-decisioning platform of its kind”: IntentCX. (The news of this deal broke in September, but the price tag wasn’t reported until this week).

According to T-Mobile, today’s customer-service options are limited because they “are rules-based and work from a finite set of data, and a fixed library of customer treatment options.” As such, “they can only offer an educated guess at the solution for a customer, and then have limited ability to actually take action.”

T-Mobile is training IntentCX on “billions” of data points from customer interactions, and because it will be integrated into T-Mobile’s operations and transaction systems, it will be able to take actions for customers.

While T-Mobile doesn’t explicitly say that it’s looking to replace customer-service representatives with artificial intelligence, it certainly implies that human contact soon won’t be needed for a lot of tasks:

“Proactive Action: IntentCX will connect directly to T-Mobile’s transaction and care systems, to preemptively identify and address customer needs and, where needed, execute tasks autonomously with customer permission. Not just AI-summarized information, but actual solutions.
Real-time decisioning: If a customer contacts T-Mobile about an issue with T-Mobile’s network or service, IntentCX will analyze T-Mobile’s network and service data in real-time and provide a solution that’s appropriate to the moment. This is an unprecedented approach to customer journey management.”

And T-Mobile may look to sell its customer-service software to other companies, too.

“Eventually, this technology could also offer other customer-obsessed companies worldwide the same opportunity to transform their approach to customer engagement, as the technology and business processes being created by this partnership have broad applications across customer-serving industries.”

A couple of thoughts here. First, this is a huge deal for OpenAI. The Information noted that this is one of the largest contracts the company has landed with an enterprise customer so far. If IntentCX is deemed a success, other companies could follow T-Mobile’s lead in 2025, benefiting OpenAI’s top line.

However, more broadly, T-Mobile’s investment marks a shift in how the world is thinking about customer service. T-Mobile is a $263 billion company, not a startup experimenting with different AI tools. If it has decided that AI customer service that automates many customer interactions is worth a $100 million investment, it’s safe to say that other large companies are probably considering automating their customer-service solutions, too, meaning that the days of talking to human representatives about your tech issues might be numbered.

Hyunsoo Rim

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.