Hey Cortana, Microsoft is Buying a Conversational AI Startup

Posted on May 21, 2018 by Paul Thurrott in Smart Home, Windows 10 with 27 Comments

Hey Cortana, Microsoft is Buying a Conversational AI Startup

The Semantic Machines team may have one-upped Cortana

Furthering its push into conversational AI (artificial intelligence), Microsoft announced this morning that it has purchased Semantic Machines, an AI startup, for an undisclosed sum. But this purchase may have a chilling effect on Cortana, Microsoft’s little-used personal digital assistant.

“Semantic Machines has developed a revolutionary new approach to building conversational AI,” Microsoft corporate vice president David Ku explains in the announcement. “Their work uses the power of machine learning to enable users to discover, access and interact with information and services in a much more natural way, and with significantly less effort.”

Curiously, a number of publications are claiming that Microsoft will use this acquisition to improve Cortana, its digital personal assistant. But the Microsoft announcement doesn’t say that: Instead, it suggests that the Semantic Machines technology is superior to its own conversational AI work with Cortana. And it says that the firm will now combine its in-house efforts with Semantic Machines’ technology to “deliver powerful, natural and more productive user experiences that will take conversational computing to a new level.”

This is notable because Microsoft has recently demoted Cortana from being a standalone assistant—which might be found in phones, PCs, smart speakers, cars, and elsewhere—to being an “assistance” technology that is built-in to other products and can integrate with popular assistants.

Cortana is not going away, according to Cortana head J Soltero, who was recently interviewed by Mary Jo Foley. But it will likely merge more into Microsoft’s other AI/machine learning efforts and be promoted as a set of capabilities and skills, and be less forward-facing as a brand.

To that end, Microsoft says that it will establish a conversational AI center of excellence in Berkeley, California to “push forward the boundaries of what is possible in language interfaces.”

Notably, that’s where Semantic Machines is based.


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Comments (27)

27 responses to “Hey Cortana, Microsoft is Buying a Conversational AI Startup”

  1. Daekar

    So... they integrate the technology from this new acquisition into Cortana and use their new folks to continue to improve things. Sounds good to me. That's been the secret to Apple's success, buy companies that make good stuff and use the heck out of their products.

    I think it's important to remember the dangers of "not developed here" mentalities. Good ideas and products are good no matter where they come from, and a competitive advantage is good regardless of its source.

  2. RR

    Microsoft London demo reported yesterday that shows Xiaoce has been doing this duplex conversation thing that Google demoed, but with real customers for the past 6 months shows that they are ahead, not behind Google in this tech. Therefore the reflex assumption, expressed in some comments, that this acquisition was a desperate catch up move on their part is wrong, I did not know this info when I commented below though.

    But it is instructive. There are two sides to any deal, it is not just one side that can have motivations. For example, it is very likely the Semantics Machine folks knew what Microsoft had achieved in China, even though Microsoft didn't make a media splash, it was still a public trial, in their direct line of work. The deep tech insiders may be signaling something here by which team they decide to join, when it came time to sell. Doesn't mean Microsoft won't squander the tech advantage though, they do that regularly.

  3. Martin Sjöholm

    "Hej Cortana!" - Nope, still not in Swedish. Years and years after we have been speaking natively to Siri on a daily basis. They just don't care, and Cortana will just fade away.

  4. Rob_Wade

    Once again, Microsoft and Nadella just continue to piss me off. How is it that this idiot CEO doesn't get it (and never has)?

  5. Mark from CO


    We've seen a lot of writing about how Microsoft was one of the top AI companies in the world, here and elsewhere. This certainly makes you wonder doesn't it? Not just about speech AI, but about how good Microsoft really is at AI in general?.

    Mark from CO

  6. NoFlames

    I'm not sure "Little used" is accurate given how it is integrated into Windows 10 operation. I personally use Cortana all the time, I wonder if I'm unusual?

  7. Bart

    I don't think it makes any difference to the end user whether the pipes and plumbing of Cortana get changed. As long as she improves. So, semantics really <pun intended>

  8. BoItmanLives

    RIP, Semantic Machines. Apparently their AI couldn't remind them that when Microsoft acquires you, it's the kiss of death.

  9. jrswarr

    I'm pretty sure that this will be good for Cortana - at least for what we perceive as Cortana. If it is not Microsoft's intent to develop a AI assistant we can talk to then Microsoft just wasted a bunch of money.

    If they do it right , perhaps they can make her smart enough to talk to Alexa and Google for us, and leverage everybody else's skills.

  10. djross95

    Yet another market retreat by Microsoft due to an inability to compete with market leaders. Perhaps it's a wise business decsion, but what battle will they commit to actually winning?

  11. Bats

    Why am I not surprised? By following this thurrott.com along with MaryJo and small number of Microsoft beat reporters, I pretty much know and feel the pulse of Microsoft.

    This news seems to me, as a direct reaction to Google's Duplex offering. Google Duplex is awesome and takes AI technology to the next level. It's so mind blowing, that I am not surprised of there being an extremely high level of suspicion with it.

    Perfected, this AI technology can possibly eliminate or reduce (partially) the personal assistant job market and practically give every single person in this world their own "Alfred", "Jarvis", "Friday"...."Majel Barret."

    Microsoft, of course, is late to this. I always joke that Microsoft is so big that Redmond may be the home hq of the company, but their hq for R&D is in Mountain View, California.

    Here is a few things, I think we can all expect. One, in the next Microsoft event, they will talk about conversational AI (duplex whatever) and make it sound like they have been in on this for sometime. Nadella will lecture on the it's importance and make connection between this amazing technology and Microsoft's and it's part in the company's overall AI strategy. While Microsoft is making it seem like they have been in on this, let's not forget the date of May 21, 2018. The date where Paul Thurrot reports Microsoft's intent to buy the an AI Startup. Second, after Google releases their Google Duplex product, Microsoft will release theirs a year or two later.

    Ya know, this is exactly how it's going to happen.

    • EZAB

      In reply to Bats:

      Also agreed. Let's hope its not a 2-3 hour lecture though!

    • Chris_Kez

      In reply to Bats:

      I can appreciate your cynicism but I don't think Microsoft could have gone from the Google IO demonstration to this startup acquisition in just two weeks. Also, Microsoft has been talking about conversational AI for a while, and they already have a bunch of related tools for developers.

      • RR

        In reply to Chris_Kez:

        I have half a mind that it could not have happened in 2 weeks, but. I am not so sure, strategic M&A can move very fast when the stars align. Also, these are industry insiders. Things that happen in public they probably have some rough sense it could happen sometime before that, and you measure the timeline from that not when the public sees it.

        Another way you can look at this is not from Microsoft's perspective, but that of the aquiree, Semantic. It could be that the Google I/O demo basically crapped their value. Like, this is the same thing they wanted to sell to these companies, and look, the companies are already doing it themselves, and they are therefore making a sensible countermove for their longer term survival by seeking an ark rather than waiting until they are downing before acting.

        Related is Microsoft has shown a propensity for bottom fishing over the last couple years for Bay Area companies. They did it with LinkedIn, with that 3D/social media startup that actually closed and they opened back up, and probably other examples that we would never know why the target sold. So, if Google I/O basically sent these guys reeling, well, "Hello, Microsoft". It could just as well be that rather than Microsoft desperately needing this. I think Microsoft knows they must expand their Silicon Valley presence & linkages. Apple & Google have used local champion status to play against Microsoft to devastating effect in the developer & public opinon wars, so with that larger context there may be a lot more sense to it that just playing catchup.

  12. LocalPCGuy

    "Cortana is not going away". Probably not. But, it seems like it will be supported in a similar manner to how Windows Mobile was, half heartedly until it fades into the shadows.

  13. irfaanwahid

    Out of curiosity, where is Mehedi?

  14. flightmytrip

    yes true!!!

    When they were going to startup they have to travel and they choose FlightMyTrip and it is so good to be serve them.