Just when you thought you were getting to know Microsoft (MSFT) it goes and changes personalities. <\/p>\n
Actually, the new-and-improved Microsoft has been making itself known for quite some time with a minimal amount of fanfare - it only became officially official last week. In that the shift is apt to make in an increasingly big difference in the company's results though, fans and followers of the company would be wise to take a closer look at what Microsoft has become. <\/p>\n
And what is this new focal point for CEO Satya Nadella? Take it with a grain of salt, because corporate slogans are as much of a sales pitch as they are an ambition anymore. But, per the company's most recent annual filing with the SEC, Microsoft is now an \"AI (artificial intelligence) first\" outfit. Previous annual reports had suggested its focal point was mobile... a mission that ended with mixed results. While Microsoft has a strong presence in the mobility market in the sense that many of its cloud services are accessible via mobile devices, Microsoft's smartphone dreams turned into nightmares. <\/p>\n
It does beg the question though - what exactly does an AI-focused Microsoft look like when artificial intelligence was never a priority before? <\/p>\n
They were touted by the company, though in light of the fact that it's the big new hot button, the AI acquisitions Microsoft has made to date weren't touted enough (and certainly not framed within the context of its new mission). <\/p>\n
As a quick recap, the more prescient artificial intelligence deals Nadella has made: <\/p>\n
1. SwiftKey <\/p>\n
Back in early 2016, Microsoft ponied up a reported $250 million to get its hands on a technology that predicts what word you're typing into your smartphone or tablet before you have to tap all the letters out. Some find it annoying because the word it guesses isn't always the one you want... a problem solved just by continuing to type. Others love the idea of not being forced to finish typing a word. <\/p>\n
At first blush it seems superfluous, and truth be told, it is. It's not quite as meaningless as some have made it out to be though, in that users have largely come to expect such a feature from most of their electronics. <\/p>\n
2. Genee <\/p>\n
Just a few months after acquiring SwiftKey last year, it bought chatbot specialist Genee, primarily to make its office productivity programs more powerful an easy to use. Users can simply speak into their computer to manipulate apps like Office 365. Its claim to fame is the ability to schedule meetings on a calendar just by understanding the context of an e-mail. <\/p>\n
The tool in itself isn't the proverbial \"killer app.\" In fact, Microsoft shut down Genee shortly after it bought it. It just didn't shut it down after ripping out the most marketable pieces of the platform and adding them to its bigger chatbot machine. <\/p>\n
Microsoft has struggled with AI chat in the past - like Tay, which quickly learned to be racist - but it's getting very, very good at conversational instructions. But the establishment of a 100-member department aimed solely improving artificial intelligence strongly suggests the company is going to keep working on its chat technologies until it gets it right. <\/p>\n
3. Maluuba <\/p>\n
It's arguably the most game-changing artificial intelligence acquisition Microsoft has made to date, even though it's the furthest away from being useful. <\/p>\n
Maluuba was the Canadian artificial intelligence outfit Microsoft bought in January of this year. It was billed as a general AI company, which could mean a lot of different things. For Maluuba though, that meant building systems that could read (and comprehend) words, understand dialog, and perform common-sense reasoning. <\/p>\n
A completely impractical but amazingly impressive use of that technology: Maluuba's technology was the platform that allowed a computer to beat the notoriously difficult Ms. Pac Man video game for the Atari 2600. Even more interesting is how it happened. Microsoft essentially arranged for a committee of different digital thought patterns with different priorities. That is, one AI's priority was to score as many points as possible. Another AI's priority was to eat the game's ghosts when they were edible. Yet another AI's purpose was avoiding those ghosts. All of the different 'committee' members negotiated each move Ms. Pac Man made at any given time, based on the risk or reward of a particular (and ever-changing) scenario in the game. <\/p>\n
The end result: The artificial intelligence achieved the best-ever known score for the game. <\/p>\n
It remains to be seen how that premise will be applied in the future, but it's got a lot of potential. It's one of the few artificial intelligence platforms that had to reason its way through a problem created by an outside, third-party source rather than one that was built from the ground up to perform a very specific, limited function. <\/p>\n
Getting a bead on the nascent artificial market is tough. There's no shortage of outlooks. There's just a shortage of history and understanding about what artificial intelligence really is and how it can be practically commercialized. <\/p>\n
To the extent AI's potential can be quantified though, PricewaterhouseCoopers thinks it will create an additional $16 trillion worth of commerce over the course of the coming ten years... that's above and beyond what would have been created without it. <\/p>\n
In other words, that's not the likely market size for artificial intelligence software, hardware and services - that figure will be smaller. Tractica thinks the actual amount of spending on AI services and hardware will be on the order of $16 billion by 2025... a number that seems reasonable and rational, though also somehow seems small relative to the value artificial intelligence will have to enterprises. In fact, others think (when factoring in the underlying software and related services that will mature with AI) the artificial intelligence market will be worth $59 billion by 2025. <\/p>\n
Whatever's in the cards, it's a worthy market to address, and Microsoft is surprisingly almost as well equipped to run the race as well as its peers and rivals can. Though meaningful revenue is still a few years off, the new Microsoft mantra is one that matters, in that it's a viable growth engine for the company. <\/p>\n
In other words, take Microsoft's AI ambitions as seriously as you should have taken its cloud-computing ambitions a couple of years ago. <\/p>\n
Disclosure: I\/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.<\/p>\n
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.<\/p>\n
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See the original post here: <\/p>\n
Microsoft's New Artificial Intelligence Mission Is Nothing To Dismiss - Seeking Alpha<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Just when you thought you were getting to know Microsoft (MSFT) it goes and changes personalities. Actually, the new-and-improved Microsoft has been making itself known for quite some time with a minimal amount of fanfare - it only became officially official last week. In that the shift is apt to make in an increasingly big difference in the company's results though, fans and followers of the company would be wise to take a closer look at what Microsoft has become Continue reading