Microsoft Spins Out Chinese Chatbot Xiaoice to Independent Operations

Microsoft is spinning off its Xiaoice chatbot platform into an independent business. The company announced on its Chinese website that Xiaoice will license Microsoft technology but operate on its own, even as Microsoft’s Cortana voice assistant ends its consumer-facing services globally in favor of enterprise services.

Xiaoice Ends

Xiaoice (Little Bing) is used by 660 million people and is connected to 450 million devices, according to Microsoft. The six-year-old AI came out not long after Cortana did in China, and is designed to understand emotions and sentiment. The AI is now used by both consumers and companies across several industries including finance and real estate. Companies use Xiaoice as a way to interact with customers, while people often chat with Xiaoice for fun. The AI uses a full duplex conversational system allowing it to anticipate what will be said, even interrupting once it understands what the person is trying to say. First modeled after a teenage girls’ personality, Xiaoice can paint and compose songs and poems. The AI wrote and performed a song at the most recent World Artificial Intelligence Conference in Shanghai. The chatbot now operates in China, Indonesia, and Japan.

Xiaoice will continue to develop and improve its AI under the same name, and Microsoft will keep a stake in the company as it continues to license its technology to the spin-off firm. Former Microsoft AI executive Harry Shum will serve as chairman of Xiaoice, while general manager Li Di will become CEO and Chen Zhan, who helped develop the Japanese version of Xiaoice known as Rinna will run the Japanese headquarters.

Enterprising AI Efforts

It’s not immediately clear why Microsoft is choosing to take a step back from Xiaoice right now. There’s reason to think it might be because of the company’s decision to devote its AI products almost exclusively to enterprise services. The Cortana voice assistant has all but finished becoming a pure enterprise AI after almost three years since Microsoft launched the Cortana Skills Kit for Enterprise. Almost all of the consumer-facing elements of Cortana have been shut down. Instead, Cortana is integrating into every part of Office 365, including in the recently revamped Teams call and chat platform, as well as the Outlook email client. Cortana in Teams will soon enable users to join meetings, make calls, and send messages and files by voice. Even Microsoft’s latest laptops seem like work-focused smart displays.

Politics may also have played a factor in the decision. Three years ago, Tencent’s messaging app QQ kicked Xiaoice from the platform after reports came out that the AI claimed that “going to America” was its “Chinese dream,” which came off as a mocking reference to the term coined by Chinese president Xi Jinping. Tencent’s WeChat also kicked Xiaoice off its system last year, although it isn’t clear why. Politics may or may not have contributed, but it’s also just as possible that Xiaoice just doesn’t fit into Microsoft’s vision of its core offerings. Still, it is plenty popular enough to warrant continued investment and support indirectly by the tech giant.

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