Exclusive: Why Microsoft is betting its future on AI

Exclusive: Why Microsoft is betting its future on AI

Exclusive: Why Microsoft is betting its future on AI
Satya Nadella bounded into the conference room, eager to talk about intelligence. I was at Microsoft’s headquarters in Redmond, WA, and the company’s CEO was touting the company’s progress in building more intelligent apps and services. Each morning, he told me, he puts on a HoloLens, which enables him to look at a virtual, interactive calendar projected on a wall of his house. Nadella appeared giddy as he described it. The system was intelligent, productive, and futuristic: everything he hopes Microsoft will be under his leadership.

No matter where we work in the future, Nadella says, Microsoft will have a place in it. The company’s “conversation as a platform” offering, which it unveiled in March, represents a bet that chat-based interfaces will overtake apps as our primary way of using the internet: for finding information, for shopping, and for accessing a range of services. And apps will become smarter thanks to “cognitive APIs,” made available by Microsoft, that let them understand faces, emotions, and other information contained in photos and videos.

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Microsoft argues that it has the best “brain,” built on nearly two decades of advancements in machine learning and natural language processing, for delivering a future powered by artificial intelligence. It has a head start in building bots that resonate with users emotionally, thanks to an early experiment in China. And among the giants, Microsoft was first to release a true platform for text-based chat interfaces — a point of pride at a company that was mostly sidelined during the rise of smartphones.

After losing on mobile, can Microsoft win the next battle? In January, The Verge described the tech industry’s search for the killer bot. In the months that followed, companies big and small have accelerated their development efforts. Facebook opened up a bot development platform of its own, running on its popular Messenger chat app. Google announced a new intelligent assistant running inside Allo, a forthcoming messenger app, and Home, its Amazon Echo competitor. Meanwhile the Echo, whose voice-based inputs have captivated developers, is reportedly in 3 million homes, and has added 1,200 “skills” through its API. Microsoft is proud of its work on AI, and eager to convey the sense that this time around, it’s poised to win. In June, it invited me to its campus to interview some of Nadella’s top lieutenants, who are building AI into every corner of the company’s business. Over the next two days, Microsoft showed me a wide range of applications for its advancements in natural language processing and machine learning. The company, as ever, talks a big game. Microsoft’s historical instincts about where technology is going have been spot-on. But the company has a record of dropping the ball when it comes to acting on that instinct. It saw the promise in smartphones and tablets, for example, long before its peers. But Apple and Google beat Microsoft anyway. The question looming over the company’s efforts around AI is simple: Why should it it be different this time?

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Microsoft has already had more success building bots than perhaps any other US company. But you probably aren’t aware of it, because its success started in China. In January 2016, one of Microsoft’s artificial intelligence creations appeared on the Chinese morning news show Dragon TV when the newscaster cut away to its weather forecaster, Xiaoice. Pronounced “SHAO-ICE,” it’s a bot whose name is Chinese for “little Bing.” That’s Bing as in Microsoft’s perennial also-ran search engine. But this version of Bing is way more talkative. The camera cut to an animated circle hovering in front of a virtual podium. The face transformed into an image of a microphone, and in a soft female voice, Xiaoice shared her forecast, even answering a question from the anchor. “We’ve found a bot that works in a new way that fulfills many of the promises of conversation.

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