Home Computers Microsoft acquires conversational AI and bot development firm

Microsoft acquires conversational AI and bot development firm

LISBON, PORTUGAL - NOVEMBER 06: Web Summit participants walk by Microsoft AI stand in FIL pavilion 1 on November 06, 2018 in Lisbon, Portugal. Web Summit is an annual technology conference which brings together a variety of technology companies to discuss the future of industry. This year’s event runs from November 5- 8 and is expected to attract around 70,000 participants.. (Photo by Horacio Villalobos - Corbis/Corbis via Getty Images)

Conversational AI is quickly becoming a way in which businesses engage with employees and customers: from creating virtual assistants and redesigning customer interactions to using conversational assistants to help employees communicate and work better together. According to Gartner, “By 2020, conversational artificial intelligence will be a supported user experience for more than 50 percent of large, consumer-centric enterprises.”

Microsoft, one of the tech giants envision a world where natural language becomes the new user interface, enabling people to do more with what they say, type and input, understanding preferences and tasks and modeling experiences based on the way people think and remember.

This vision led to Microsoft  acquiring the conversational AI and bot development software vendor XOXCO Inc. for an undisclosed amount. Microsoft announced its acquisition plans on November 14, the same day it is going public with a number of other AI product and service announcements.

XOXCO an Austin-based company that builds bots and conversational artificial intelligence tools, the latest in a series of deals to boost the tech giant’s AI bonafides. The company was founded in 2008 and has since 2013, been working on conversational AI.

Microsoft and XOXCO have teamed up together in the past.  Among  XOXCO products are Howdy.ai, which Microsoft describes as “the first commercially available bot for Slack that helps schedule meetings.” Howdy assists with the creation of custom bots, including bots for work chat, bots for customer support and bots for marketing. XOXCO also sells Botkit, a collection of development tools for those working on GitHub.

In a blog post, Microsoft said it sees a “world where natural language becomes the new user interface,” helping people be more productive. The acquisition will help beef up the Microsoft Bot Framework service, which supports more than 360,000 developers today.

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Microsoft isn’t saying how it will integrate XOXCO into the rest of the company or what it plans to do with Howdy on Slack. However, announcement of the XOXCO acquisition was made by Lili Cheng, who is the Corporate Vice President of Conversational AI at Microsoft — and who recently moved from the Research and AI group at the company to the Devices and Experiences team.

During the last six months, Microsoft has bought a number of AI development companies, including conversational AI-focused Semantic Machines in May; reinforcement learning and simulation vendor Bonsai in July; and deep learning and AI model specialist Lobe in September.Microsoft has been working on various conversational AI projects over the last few years.

The deal for XOXCO comes amid a series of announcement out of an AI event in San Francisco today. As part of that, Microsoft unveiled a new set of open-source tools to help businesses build out their own branded digital assistant. This development shows Microsoft is interested in getting customers to use its developer tools under the hood just as much, if not more, than adopting its own digital assistant Cortana.

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Microsoft corporate VP for AI Eric Boyd, says the Virtual Assistant Accelerator pulls together some AI tools such as speech-to-text, natural language processing and an action engine into a single place to simplify bot creation.

“It’s a tool that makes it much easier for you to go and create a virtual assistant. It orchestrates a number of components that we offer, but we didn’t make them easy to use [together]. And so it’s really simplifying the creation of a virtual assistant,” he explained.

Microsoft officials continue to bet on the idea that natural language will become the new user interface at some point.

In other conversational-AI news, Microsoft is releasing suggested guidelines which are designed to help customers think about ways to develop bots and other conversational AI tools responsibly. The guidelines were derived from Microsoft’s own experiences developing tools such as Cortana and Zo and cover topics including designing bots related to employment, finances, physical and mental well-being, along with other sensitive uses.

Microsoft also is moving a number of its translation technologies out of its labs and into commercial products, officials said this week. The company is making available a preview in Azure Cognitive Services a neural text-to-speech synthesis system that generates digital voices from text. “The technology can be used to make interactions with chatbots and virtual assistants more natural and engaging, convert digital texts such as e-books into audiobooks and enhance in-car navigation,” according to Microsoft’s blog post.


  1. Why does it seem like MS is constantly playing catch-up? Even applies to Nadella’s favorite buzzword of 2018… AI!
    Google had perhaps the best developer conference demo of all time, with Duplex. And finally MS scrambles to show some relevancy in AI? Trying to own it, by slapping a name on it… “conversational AI”? They let Cortana wither on the vine for 3 years, and now they want to teach her to speak as well as Google Assistant.


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