Microsoft is Going All-In on AI

In its 2017 Annual Report. there are six references to AI–up from zero in 2016–and this strategic re-direction is at the heart of its corporate vision statement:

“Our strategic vision is to compete and grow by building best-in-class platforms and productivity services for an intelligent cloud and an intelligent edge infused with AI.”

In comparison, last year’s version read: “Our strategic vision is to compete and grow as a productivity and platform company for the mobile-first and cloud-first world.” Those words echo Microsoft CEO Satya Nadella’s first articulation in 2014, but mobile has now been replaced by AI.

Microsoft’s cloud computing portfolio includes popular products like Office 365 and the Azure public cloud, but struggles with its Windows Phone OS, and ill-fated acquisition of Nokia in 2015, have re-focused corporate eyes on AI.

Sundar Pichai, CEO of Alphabet’s Google, has said the world is moving off mobile-first to AI-first, and Facebook is investing heavily in AI research and product.

As Fortune notes, “AI has become a battle ground with Facebook, Google, Amazon and IBM all pouring resources into technologies to make software smarter and more adaptive.”

“The goal is to endow software with human-like characteristics.”

Last year, Microsoft created a 5,000-person Artificial Intelligence and Research group to focus “on our AI development and other forward-looking research and development efforts spanning infrastructure, services, applications, and search,” said the annual report. Last month, that group created a sub-unit to tackle challenges like designing AI chips to power its next HoloLens VR device.

Last month, Microsoft announced a new iPhone app for the visually impaired, a new “Ethical Design Guide for AI” and an initiative called AI for Earth encouraging leveraging AI for environmental solutions.

But regardless of size, no company is immune from missteps. For Microsoft, it was last year’s release of Tay, an AI chatterbot that began posting inflammatory and offensive tweets, causing Microsoft to shut it down just 16 hours after launch.

Tay was inadvertently re-released on Twitter during testing and tweeted out comments like “kush! [I’m smoking kush infront the police]