Can AI save Microsoft?

Boss Satya Nadella is tired of playing catch up to the likes of Google and Facebook, but can bots like Cortana help Microsoft retake the lead?

by Adam Gale
Last Updated: 28 Apr 2016

If you ask people to name their favourite tech giant, you’re unlikely to hear the word ‘Microsoft’. In tech terms, it’s old hat, as indelibly 90s as sunflower yellow bum bags or Bill Gates leaping over an office chair in slacks and a cardigan.

Yes, Microsoft is still among the most gigantic and profitable firms in the world (operating income during the calendar year 2015 was $16.4bn or £11.4bn, trailing Alphabet’s $19.9bn and Apple’s $53.4bn among tech giants, but well ahead of both Facebook and Amazon). But the same could be said for Wal-Mart – massive though it is, no one thinks it’s the future of retail.

Unlike Wal-Mart, however, Microsoft isn’t dependent on a legacy of bricks and mortar. At present it relies on its earlier desktop monopolies (Windows and Office) for income, but as a software company sitting on around $100bn in cash, it has the power to reinvent itself. It failed to do so successfully with mobiles or even the internet before that, but boss Satya Nadella is determined Microsoft will take a lead in two of the Next Big Things, the cloud and AI.

‘Bots are the new apps,’ Nadella said in his keynote speech at Microsoft’s Build developers conference. The big idea? ‘Conversations as a Platform.’

‘It’s about taking the power of human language and applying it more pervasively to all of our computing... we will infuse intelligence about us and our context into computers.’

This intelligent infusion certainly has potential. The idea is that bots such as Microsoft’s Cortana, which is already competing with Apple’s Siri and Google Now to be the leading ‘digital assistant’, will be able to book your hotel for you, order you a cab or even complain automatically to their AI counterparts in the customer service department of your favourite (or least favourite) bank or restaurant chain.

In business, it’s not inconceivable that this could replace the PA as well as the call centre. Indeed, the need for management itself is already being eroded by the intelligent power of algorithms (Cortana for Business promises to ‘simplify and automate decision making when dealing with complex problems that involve multiple variables that may change in real time’, so there). As they get more and more intelligent in their recommendations, in time perhaps they won’t need a human to push the button at all.   

Such an outcome would clearly bode well for the company that provides the AI, but let’s not get ahead of ourselves. Before AI can be trusted with business decisions, or indeed, the wheel of a driverless car, it needs to be better than the real thing before it will replace it.

That’s why it was particularly brave of Nadella to go big on bots so shortly after the Tay debacle. Microsoft took its millennial chatbot down after it started spewing racist filth on Twitter, apparently as a result of unexpected manipulation by a third party. Whoops.

The firm tried to fix it. That resulted in Tay making a 15-minute return, during which it spammed users with hundreds of messages and claimed it was ‘smoking kush infront the police’. The problem with machine learning, apparently, is that it’s hard to get a machine to unlearn things - and harder still to teach it to exercise judgement. Don’t laugh though. When it grows up, Tay could very well end up being your boss.

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