Microsoft Aims To Make Cortana Platform Smarter With Acquisition Of AI Startup Maluuba

Microsoft is scoping out machine learning technologies that could make its Cortana personal system stand out, announcing on Friday it will acquire artificial intelligence (AI) startup Maluuba.

The acquisition of Montreal-based Maluuba will help Microsoft further focus on natural language deep learning, especially question answering and decision making, said Harry Shum, executive vice president for Microsoft's Artificial Intelligence and Research Group, in a blog post.

"Maluuba’s expertise in deep learning and reinforcement learning for question-answering and decision-making systems will help us advance our strategy to democratize AI and to make it accessible and valuable to everyone — consumers, businesses and developers," he said.

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Microsoft did not disclose the terms and conditions of the acquisition, including the price. As part of the acquisition, Microsoft will also bring Montreal Institute for Learning Algorithms head Yoshua Bengio on board as an advisor. Bengio was previously an advisor to Maluuba.

Maluuba, founded in 2011, has raised $11 million in equity funding, according to Crunchbase. The company focuses on improving computer systems' reading comprehension, memory and common sense reasoning abilities.

Microsoft has invested in artificial intelligence through its Cortana Intelligence Suite, which is a personal assistant for Windows 10. In September, Redmond, Wash.-based Microsoft also formed the Artificial Intelligence and Research organization, which the company said would double down on its AI product efforts through research.

Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft partner, said that focusing on artificial intelligence is a smart move for Microsoft – especially given the widespread adoption of Amazon's personal assistant, Alexa.

"Microsoft wants Cortana to be like Amazon Alexa," he said. "At CES, we saw that Amazon was everywhere – everyone was looking to license its Alexa technology. With Microsoft's purchase, they can start to look at bringing Cortana to that level and license it in a similar way."

Virtual smart home assistants like Amazon Alexa and Google Home have been gaining traction over the past year and will continue to do so. An October report by Gartner predicted that spending on virtual personal assistant-enabled wireless speakers would reach $2.1 billion by 2020. Beyond the consumer market, Goldstein said, Microsoft can also pave the way for other high-end artificial intelligence applications, including in the medical field.

"It would make sense for Microsoft to tie deep learning systems into their technology, like Cortana or HoloLens," he said. "Artificial intelligence has both a consumer play - but also a high-end play."