Telstra share price slumps despite record $700 million AI investment

Investors don't seem impressed with this massive AI investment…

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It's looking like the S&P/ASX 200 Index (ASX: XJO) is on track for another positive session so far this Wednesday (touch wood). At the time of writing, the ASX 200 has gained a tentative 0.2% and is back over 8,230 points.

But let's talk about what's happening with the Telstra Group Ltd (ASX: TLS) share price.

Investors have left Telstra shares behind today. Although the ASX 200 has risen, the Telstra share price is nursing a hefty 0.98% loss and is currently down to $4.03 a share. That's after the ASX 200 telco closed at $4.07 yesterday afternoon and opened at $4.06 this morning.

This fall in the Telstra share price comes despite a major development out of the telco this Wednesday.

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone

Image source: Getty Images

Telstra makes historic AI investment

As reported by The Sydney Morning Herald, Telstra is primed to announce a new $700 million deployment of new artificial intelligence (AI) technology across its business.

The telco will reportedly partner with international tech and AI giant Accenture plc (NYSE: ACN) for this joint venture. It will see Telstra spend $100 million per year for seven years, along with potentially additional investments from Accenture. However, Accenture is set to own a 60% stake in the joint venture.

It will see Telstra reportedly consolidate 18 current data and AI providers down to two. It will also build "specialised AI tools for its teams to 'work smarter and faster'".

This is big news for an ASX share as it reportedly represents the largest investments in AI technology by an Australian public company.

Here's some of what Telstra CEO Vicky Brady had to say on this announcement:

We've made strong progress on our AI goals and already have hundreds of value-driving AI use-cases across the business…

But our data and AI ambition goes well beyond introducing AI tools … From building self-healing, resilient networks to reinventing experiences for our customers and the way we work, AI will help power an exciting, connected future.

Telstra share price snapshot

Telstra investors might be a little disappointed that today's revelations don't seem to be exciting the market. After all, Telstra shares have had a rough time of late. The ASX 200 telco is up just 1.5% over the past 12 months, a period that has seen the ASX 200 Index gain a far rosier 9.9%:

At the current Telstra share price, this blue-chip stock is trading on a dividend yield of 4.44%.

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Accenture Plc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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