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Microsoft spins out 5-year-old Chinese chatbot Xiaoice

Microsoft is shedding its empathetic chatbot Xiaoice into an independent entity, the U.S. software behemoth said (in Chinese) Monday, confirming an earlier report by the Chinese news site Chuhaipost in June.

The announcement came several months after Microsoft announced it would close down its voice assistant app Cortana in China among other countries late last year.

Xiaoice has over the years enlisted some of the best minds in artificial intelligence and ventured beyond China into countries like Japan and Indonesia. Microsoft said it called the shots to accelerate Xiaoice’s “localized innovation” and buildout of the chatbot’s “commercial ecosystem.”

The spinoff will see the new entity license technologies from Microsoft for subsequent research and development in Xiaoice and continue to use the Xiaoice brand (and Rinna in Japanese), while Microsoft will retain its stakes in the new company.

In 2014, a small team of Microsoft’s Bing researchers unveiled Xiaoice, which means “Little Bing” in Chinese. The bot immediately created a sensation in China and was regarded by many as their virtual girlfriend. The chatbot came just a few weeks after Microsoft rolled out Cortana in the country. Modeled on the personality of a teenage girl, Xiaoice aims to add a more human and social element to chatbots. In Microsoft’s own words, she wants to be a user’s friend.

Like all foreign companies, Microsoft has to grapple with China’s censorship. In 2017, Xiaoice was removed by Tencent’s instant messenger QQ over suspicions of politically sensitive speech.

The project has involved some of the most prestigious scientists in the AI land, ranging from Lu Qi, who went on to join Baidu as its chief operating officer and brought Y Combinator to China; Jing Kun, who took up a post at Baidu to head the search giant’s smart devices; and Harry Shum, a former executive at Microsoft’s storied Artificial Intelligence and Research unit and now sits on the board of fledgling news app News Break.

Shum will serve as chairman at Xiaoice’s new standalone entity. Li Di, general manager of Xiaoice, will serve as chief executive officer. Chen Zhan, a developer of the Japanese chatbot Rinna, is appointed general manager of the Japanese office.

The new company will retain the right to use the “Xiaoice” and “Rinna” brands, with a mission to further develop its client base across the Greater China region, Japan and Indonesia.

Microsoft claimed that Xiaoice has a reach of 660 million users and 450 million third-party smart devices globally at the last count. The chatbot has found applications in such areas as finance, retail, auto, real estate and fashion, in which it claimed it can “mine context, tonality and emotions from text to create unique patterns within seconds.”

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China Roundup: SoftBank leads Didi’s $500M round and Meituan crosses $100B valuation

Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. Last week, we had a barrage of news ranging from SoftBank’s latest bet on China’s autonomous driving sector to Chinese apps making waves in the U.S. (not TikTok).

China tech abroad

The other Chinese apps trending in America

TikTok isn’t the only app with a Chinese background that’s making waves in the U.S. A brand new short-video app called Zynn has been topping the iOS chart in America since May 26, just weeks after its debut. Zynn’s maker is no stranger to Chinese users: it was developed by short-video platform Kuaishou, the nemesis of Douyin, TikTok’s Chinese sister.

The killer feature behind Zynn’s rise is an incentive system that pays people small amounts of cash to sign up, watch videos or invite others to join, a common user acquisition tactic in the Chinese internet industry.

The other app that’s been trending in the U.S. for a while is News Break, a hyper-local news app founded by China’s media veteran Jeff Zheng, with teams in China and the U.S. It announced a heavy-hitting move last week as it onboards Harry Shum, former boss of Microsoft AI and Research Group, as its board chairman.

Alibaba looks for overseas influencers

The Chinese e-commerce giant is searching for live-streaming hosts in Europe and other overseas countries to market its products on AliExpress, its marketplace for consumers outside China. Live-streaming dancing and singing is nothing new, but the model of selling through live videos, during which consumers can interact with a salesperson or session host, has gained major ground in China as shops remained shut for weeks during the coronavirus outbreak.

In Q1 2020, China recorded more than 4 million e-commerce live-streaming sessions across various platforms, including Alibaba. Now the Chinese giant wants to replicate its success abroad, pledging that the new business model can create up to 100,000 new jobs for content creators around the world.

Oppo in Germany

Oppo announced last week its new European headquarters in Düsseldorf, Germany, a sign that the Chinese smartphone maker has gotten more serious on the continent. The move came weeks after it signed a distribution deal with Vodafone to sell its phones in seven European countries. Oppo was also one of the first manufacturers to launch a 5G commercial phone in Europe.

Chinese tech stocks return

We speculated last week that Hong Kong might become an increasingly appealing destination for U.S.-listed Chinese tech companies, many of which will be feeling the heat of tightening accounting rules targeting foreign companies. Two firms have already taken action. JD.com and NetEase, two of China’s biggest internet firms, have won approvals to list in Hong Kong, Bloomberg reported, citing sources.

China tech back home

SoftBank doubles down on Didi

Massive losses in SoftBank’s first Vision Fund didn’t seem to deter the Japanese startup benefactor from placing bold bets. China’s ride-hailing giant Didi has completed an outsized investment of over $500 million in its new autonomous driving subsidiary. The financing led by SoftBank marked the single-largest fundraising round in China’s autonomous driving sector.

The capital will give Didi a huge boost in the race to win the autonomous driving race, where it is a relative latecomer. It’s competing with deep-pocketed players that are aggressively testing across the world, including the likes of Alibaba, Tencent and Baidu, and startups such as Momenta, NIO and Pony.ai.

Marriage of e-commerce and live streaming

Speaking of live-streaming e-commerce, two of China’s biggest internet companies have teamed up to exploit the new business model. JD, the online retailer that is Alibaba’s long-time archrival, has signed a strategic partnership with Kuaishou — yes, the maker of Zynn and TikTok’s rival in China.

The collaboration is part of a rising trend in the Chinese internet, where short video apps and e-commerce platforms pally up to explore new monetization avenues. The thinking goes that video platforms can leverage the trust that influencers instill in their audience to tout products.

Meituan hit record valuation

Despite reporting an unprofitable first quarter, Meituan, a leader in China’s food delivery sector, saw its shares reach a record high last week to bring its valuation to over $100 billion.

Notion got banned in China, briefly

Notion, the fast-growing work collaboration tool that recently hit a $2 billion valuation and has attracted a loyal following in China, was briefly banned in China last week. It’s still investigating the cause of the ban, but the timing noticeably coincided with China’s annual parliament meeting, which began last week after a two-month delay due to COVID-19. Internet regulation and censorship normally toughen around key political meetings in the country.

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