Walmart said Tuesday it was entering into a strategic partnership with Microsoft on "digital transformation" for the onetime retail industry leader.
The move is aimed at helping Walmart compete better against Amazon, which is taking a growing share of retail sales in the United States and globally.
The two firms said the partnership was focused on using artificial intelligence and other technology tools to help manage costs, expand operations and innovate faster.
"Walmart's commitment to technology is centered around creating incredibly convenient ways for customers to shop and empowering associates to do their best work," said Walmart chief executive Doug McMillon.
Microsoft's business cloud computing platform known as Azure will help Walmart manage operations ranging from refrigeration and air conditioning to improving its supply chain and transportation.
"The world's leading companies run on our cloud, and I'm thrilled to partner with Walmart to accelerate their digital transformation with Microsoft Azure and Microsoft 365," said Satya Nadella, CEO of Microsoft.
Walmart is already using Microsoft services for some applications and will expand that to tap into Microsoft's machine learning, artificial intelligence, and data platform, according to the statement.
Earlier this month, the research firm eMarketer said Amazon's surging growth would enable it to capture 49.1 per cent of US online retail sales this year, up from 43.5 per cent.
Amazon is far ahead of online rivals like eBay, with 6.6 per cent of ecommerce, and Apple, at 3.9 per cent, according to eMarketer, which estimated Walmart's share at 3.7 per cent.
According to the research, Amazon now controls nearly five of the total US retail market, including online and offline.