Photo: VCG

 
Microsoft on Monday announced it will divest its Xiaoice business - one of the most popular chatbots in the world - and turn it into an independent company registered in China, while China and the US are competing as global tech superpowers. 

Harry Shum has been appointed as chairman of the new venture, Microsoft told the Global Times, adding that the creator of the chatbot, Li Di, will serve as CEO and Chen Zhan will be general manager of its Japan subsidiary. 

"The aim is to enable the Xiaoice team to accelerate the pace of local innovation and commercialization of Xiaoice technologies, accelerate the growth of the Xiaoice ecosystem, and provide much-requested customized services for Xiaoice customers and partners," Microsoft said in a news release sent to the Global Times, noting it will maintain an investment interest in the company and will license all Xiaoice technologies to the new company.

The latest display by Xiaoice was a music show on July 9 at the World Artificial Intelligence Conference 2020 held in Shanghai. 

Xiaoice has developed 660 million online users and is on 450 million third-party smart devices. More than 900 million people have accessed content through Xiaoice, according to Microsoft, making it one of the largest cross-domain AI systems in the world. 

On the commercial level, enterprises in financial services, retail, autos, real estate, and textiles have used Xiaoice services in their businesses.

In China, Xiaoice has cooperated with Tencent's QQ, Sina Weibo and news feed mobile app Toutiao. Users are also able to call the chatbot on intelligent hardware devices from Huawei, Xiaomi, OPPO and Vivo. 

"The main reason for Microsoft's move is to localize the Xiaoice business better in China, for both commercial benefits and wider application scenarios compared with the US market," Liu Dingding, an independent tech analyst in Beijing, told the Global Times on Monday. 

Amid the escalating tech competition between China and the US, with both ramping up efforts to become the leading AI global superpower, Microsoft will not give up the lucrative Chinese market as it remains one of the largest and most vital of overseas markets for the company, Liu noted. 

"The US tech giant's decision shows that some US companies are still holding an open mind and are willing to develop and explore cutting-edge technologies together with Chinese tech talent and Chinese companies," Liu said. 

Microsoft said all related work is expected to be completed in the coming months and Xiaoice will continue to grow its partner engagement to serve a wider range of customers in China, Japan and Indonesia.

The Xiaoice team has nearly 200 employees at present and about 50-60 in China together with dozens of employees in Japan will join the new venture, news outlet Caixin reported.