Microsoft acquires conversational AI startup Semantic Machines to help bots sound more lifelike

Microsoft announced today that it has acquired Semantic Machines, a Berkeley-based startup that wants to solve one of the biggest challenges in conversational AI: making chatbots sound more human and less like, well, bots.

In a blog post, Microsoft AI& Research chief technology officer David Ku wrote that” with the acquisition of Semantic Machines, we will establish a conversational AI center of excellence in Berkeley to push forward the boundaries of what is possible in language interfaces .”

According to Crunchbase, Semantic Machines was founded in 2014 and raised about $20.9 million in funding from investors, including General Catalyst and Bain Capital Ventures.

In a 2016 profile, co-founder and chief scientist Dan Klein told TechCrunch that “today’s dialog technology is mostly orthogonal. You want a conversational system to be contextual so when you interpret a sentence things don’t stand in isolation.” By focusing on memory, Semantic Machines claims its AI can render conversations that not only answer or predict topics more accurately, but also flow naturally, something that Siri, Google Assistant, Alexa, Microsoft’s own Cortana and other virtual assistants still struggle to accomplish.

Instead of constructing its own consumer products, Semantic Machines focused on enterprise customers. This means it will fit in well with Microsoft’s conversational AI-based products. These include Microsoft Cognitive Services and Azure Bot Service, which the company tells are used by one million and 300,000 developers, respectively, and its virtual deputies Cortana and Xiaolce.

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Microsoft attempts to spin its role in counterfeiting case

Earlier this week Eric Lundgren was sentenced to 15 months in prison for selling what Microsoft claimed was ” forgery software ,” but which was in fact only recovery CDs loaded with data anyone can download for free. The company has now put up a blog post defining “the facts” straight-out, though it’s something of a limited decide of those facts.

” We are sharing the information collected now and answering publicly because we believe both Microsoft’s role in the case and the facts themselves are being falsified ,” the company wrote. But it carefully avoids the deliberate misconception about software that it promulgated in court.

That misconception, which vastly exaggerated Lundgren’s crime and led to the sentence he received, is simply to conflate software with a licence to operate that software. Without go into details( my original post spells it out at length) it maintained in court that the disc Lundgren was attempting to sell were equivalent to entire licensed operating systems, when they were simply recovery discs that any user, refurbisher, or producer can download and burn for free. Lundgren was going to sell them to repair shops for a quarter each so they could hand them out to people who needed them.

Hardly anyone even builds these discs any more, surely not Microsoft, and they’re pretty much worthless without a licensed transcript of the OS in the first place. But Microsoft persuaded the judges that a piece of software with no license or product key — meaning it won’t work properly, if at all — is worth the same as one with a license.

Lundgren had already pleaded guilty to infringing Dell’s trademark by copying the appear of its disc, but the value Microsoft convinced the magistrates those discs have( a total of $700,000) immediately led to his 15 -month sentence.

Anyway, the company isn’t happy with the appear it has of sending a guy to prison for stealing something with no value to anyone but someone with a hobo computer and no backup. It summarizes what it thinks are the most important points as follows, with my commentary in accordance with the bullets.

Microsoft did not bring this case : U.S. Customs referred the case to federal prosecutors after intercepting the transport of forgery software imported from China by Mr. Lundgren.

This is perfectly true, however Microsoft has continually falsified the nature and value of the disc, falsely claiming that they led to lost sales. That’s not possible, of course, since Microsoft devotes the contents of these discs away for free. It sells licenses to operate Windows, something you’d have to have already if you wanted to use the discs in the first place.

Lundgren established an elaborate forgery supply chain in China : Mr. Lundgren traveled extensively in China to set up a production line and designed counterfeit molds for Microsoft software in order to unlawfully manufacture counterfeit disc in significant volumes.

Microsoft is trying to make it sound like the guy is some criminal mastermind operating some big time Windows pirating empire. He literally gave a Dell recovery disc to a duplication shop and told them to attain exact copies of it, including the label and paper sleeve.

Lundgren failed to stop after being alerted : Mr. Lundgren was even cautioned by a customs seizure notice that his conduct was illegal and given the opportunity to stop before he was prosecuted.

I can’t speak to this one, but Lundgren told me that the first notification he had that this was being pursued by anyone was when they raided his house. The monetary value of the disc was so small and the counterfeiting piece so minor( fake labels for duplications of disc that Dell doesn’t even offer any more) that if anything it would be a penalty and confiscation of the shipment , not a 5-year case alleging millions in damages.

Lundgren pleaded guilty: The counterfeit disc obtained by Mr. Lundgren were sold to refurbishers in the United States for his personal profit and Mr. Lundgren and his codefendant both pleaded guilty to federal felony crimes.

Lundgren pleaded guilty to counterfeiting the Dell discs , not to counterfeiting Microsoft software. It’s an important distinction because the disc are nearly worthless and copyright crimes are sentenced based on the value of the infringed item.

Lundgren went to great lengths to mislead people : His own emails submitted as evidence in the case demonstrate the lengths to which Mr. Lundgren ran in an attempt to stimulate his counterfeit software look like genuine software. They also prove him directing his co-defendant to detect less discerning customers who would be more easily deluded if people objected to the counterfeits.

Printing an accurate copy of a label for a disc isn’t exactly “great lengths.” Early on the company in China published” Made in USA” on the disc and” Constructed in Canada” on the sleeve, and had a yellow background when it should have been green — that’s the kind of thing he was fixing.

Lundgren intended to profit from his actions : His own emails submitted as evidence before the court make clear that Mr. Lundgren’s motivation was to sell counterfeit software to generate income for himself.

The plan was to sell these virtually worthless disc — remember, anybody can make one for free — for a quarter each to refurbishers. Records, however, show that Lundgren had sold several thousand to one purchaser for$ 3-4 each, which is contrary to this assertion. I’ve asked him for clarification on this.

Microsoft has a strong program to support legitimate refurbishers and recyclers : Our program supports hundreds of legitimate recyclers, while protecting customers.

The implication is that that Lundgren is not a legitimate refurbisher or recycler. He pointed out earlier, however, that his company, which handles recycling for Lenovo, Nintendo, and others, takes care of more e-waste in a year than Microsoft has in a decade.

When a refurbisher installs a fresh version of Windows on a refurbished PC, we charge a discounted rate of $25 for the software and a new license- “its not” free.

But if they’re not installing a fresh version of Windows, because the machine already has a licensed copy on it, as so many do, the software is free. There’s no limit on how many a company can build on its own; Microsoft only charges for the licenses. Here, go make one yourself in case you need to do it.

Mr. Lundgren’s scheme was simple. He was counterfeiting Windows software in China and importing it to the United States. Mr. Lundgren aimed the software to be sold to the refurbisher community as if it was a legitimate, licensed transcript of Windows.

There’s the key right there.” As if it was a legitimate, licensed copy of Windows .”

These are not licensed copies of Windows! They’re discs everyone can induce, and that manufacturers and refurbishers can print as many of as they like, to give to customers who already have a copy of Windows. These disc are for repairing or re-installing a copy of the OS. They did not come with licenses and Lundgren was not selling or licenses.

Don’t let Microsoft fool you the route they helped fool the judges. A recovery disc is something you or I or a refurbisher can make right now for free. A license to operate Windows comes from Microsoft and costs good fund. They’re not the same thing and Lundgren was going to sell the former , not the latter.

I’ve asked Microsoft to explain this last point and will update the post if I hear back.

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Microsoft and DJI team up to bring smarter drones to the enterprise

At the Microsoft Build developer conference today, Microsoft and Chinese drone manufacturer DJI announced a new partnership that aims to bringing more of Microsoft’s machine learning smarts to commercial dronings. Given Microsoft’s current focus on bringing intelligence to the edge, this is almost a logical partnership, given that drones are essentially semi-autonomous edge computing devices.

DJI also today announced that Azure is now its preferred cloud computing partner and that it will use the platform to analyze video data, for example. The two companies also plan to offer new commercial droning answers use Azure IoT Edge and associated AI technologies for verticals like agriculture, building and public safety. Indeed, the companies are already working together on Microsoft’s FarmBeats answer, an AI and IoT platform for farmers.

As part of this partnership, DJI is launching a software development kit( SDK) for Windows that will allow Windows developers to construct native apps to control DJI drones. Use the SDK, developers can also integrate third-party tools for managing warheads or accessing sensors and robotics components on their dronings. DJI already offers a Windows-based ground station.

” DJI is excited to form this unique partnership with Microsoft to bring the power of DJI aerial platforms to the Microsoft developer ecosystem ,” told Roger Luo, DJI president, in today’s announcement.” Utilizing our new SDK, Windows developers will soon be able to employ dronings, AI and machine learning technologies to create intelligent flying robots that will save business hour and money and help make drone technology a mainstay in the workplace .”

Interestingly, Microsoft also stresses that this partnership dedicates DJI access to its Azure IP Advantage program.” For Microsoft, existing cooperation is a fine example of the important role IP plays in ensuring a healthy and vibrant technology ecosystem and builds upon existing partnerships in emerging sectors such as connected autoes and personal wearables ,” the company notes in today’s announcement.

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By keeping its head in the cloud, Microsoft makes it rain on shareholders

Thanks in part to its colossal cloud business, Microsoft earnings are drenching stockholders in dollars.

For the quarter ending March 31, 2018, the tech ringer from Redmond saw its revenue increase to $26.8 billion( up 16 percent) from $23.2 billion, with operating income up 23 percent to $8.3 billion, up from $6.7 billion.

Income was a whopping $7.4 billion( up from $5.5 billion) and diluted earnings per share were 95 cents versus analyst expectations of 85 pennies per share, according to FactSet.

Despite the earnings beat, shares of the company stock fell as much as 1 percent in after-hours trading on the Nasdaq stock exchange.

Floating much of Microsoft’s success for the quarter was the continued strength of the company’s cloud business, which chief executive Satya Nadella singled out in a statement.

” Our results this one-quarter reflect the trust people and organizations are placing in the Microsoft Cloud ,” Nadella told.” We are innovating across key growth categories of infrastructure, AI, productivity and business applications .”

The company also returned $6.3 billion to shareholders in dividends and share repurchases in the third one-quarter 2018, an increase of 37 percent.

The company notched wins across the board. In addition to the growth of its cloud business — led by Azure( which grew 93 percent) — Microsoft also recorded strong growth from LinkedIn, which insured revenue increase 37 percent to $1.3 billion and hardware revenue from the Surface increasing 32 percent.

Even the move of Microsoft office into a hosted business seemed to be stanched the flow of hemorrhaging from the company’s former cash cow. The company counts 135 million business users on Office 365, and 30.6 million customer subscriptions for the service.

The Surface numbers are notable because it’s perhaps the first indication that its hardware successes aren’t necessarily limited to the Xbox( insert Zune joke here ).

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90s kids rejoice! Microsoft releases the original Windows 3.0 File Manager source code

Microsoft has released the source code for the original, 1990 s-era File Manager that is so familiar to all of us who were dragging and dropping on Windows 3.0. The code, which is available on Github for the purposes of the MIT OSS license, will compile under Windows 10.

File Manager uses the multiple-document interface or MDI to display multiple folders inside one window. This interface style, which changed drastically with later versions of Windows, was the standard for almost a decade of Windows releases.

These little gifts to the open source community are definitely fun but not everyone is happy. One Hacker News reader noted that” Most of the MSFT open source stuff is either litter or completely unmaintained. Only a couple of high profile projects are maintained and they jam opt-out telemetry in if you like it or not( despite hundreds of commentaries requesting them to go away ). Even Scott Hanselman getting involved in one of our tickets got it nowhere. Same strong arming and neglect for customers .”

Ultimately these “gifts” to users are definitely a lot of fun and a great example of nostalgia-ware. Let me know how yours compiles by Tweeting me at @johnbiggs. I’d love to see it running again.

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Microsoft built its own custom Linux kernel for its new IoT service

At a small press event in San Francisco, Microsoft today announced the launch of a secure end-to-end IoT product that focuses on microcontroller-based devices — the kind of devices that use tiny and relatively low-powered microcontrollers( MCUs) for basic control or connectivity features. Typically, these kinds of devices, which could be anything from a doll to a household gadget or an industrial application, don’t often get updated and hence, security often suffers.

At the core of Azure Sphere is a new class of certified MCUs. As Microsoft president and chief legal officer Brad Smith stressed in today’s announcement, Microsoft will license these new Azure Sphere chips for free, in hopes to jump-start the Azure Sphere ecosystem.

Because it’s hard to secure a device you can’t update or get telemetry from, it’s no amaze that these devices will feature built-in connectivity. And with that connectivity, these devices can also connect to the Azure Sphere Security Service in the cloud.

Now, you probably assume that these devices will operate Windows, but you’re wrong. For the first time ever, Microsoft is launching a custom Linux kernel and distribution: the Azure Sphere OS. It’s an update to the kind of real-time operating systems that today’s MCUs often use.

Why use Linux?” With Azure Sphere, Microsoft is addressing an entirely new class of IoT devices, the MCU ,” Rob Lefferts, Microsoft’s partner director for Windows enterprise and security told me at the event .” Windows IoT runs on microprocessor units( MPUs) which have at least 100 x the power of the MCU. The Microsoft-secured Linux kernel used in the Azure Sphere IoT OS is shared under an OSS license so that silicon partners can quickly enable new silicon innovations .” And those partners are also very comfortable with taking an open-source release and integrating that with their products.

To get the process started, MediaTek is making the first set of these new MCUs. These are low-powered, single-core ARM-A7 systems that run at 500 MHz and include WiFi connectivity as well as a number of other I/ O options.

As far as the open ecosystem goes, Smith also stressed that the devices can be used with services that run on any other cloud , no matter whether that’s AWS or the Alibaba Cloud.

Interestingly, Amazon’s AWS unit announced a somewhat similar project at its re: Invent seminar last year. It’s probably no astound that these big cloud providers are interested in MCUs, given that while the devices themselves are not bound to any cloud, the only style to get the full value out of them is in combination with cloud services, whether that’s for authenticating new devices, updating operating system or managing the software that runs on them.

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New federal rules blamed in disappearance of Kindle erotica titles

The upcoming Fight Online Sex Trafficking Act, in addition to stimulating Microsoft move to reduce obscenity on its platform, has hit erotica authors on Amazon. After many authors find their rankings stripped on the Kindle store, basically reducing their availability and visibility, while forcing others in the romance category to recategorize or get dinged as well.

The Digital Reader followed the changes the coming week, reporting that” I have seen numerous provides information on Facebook, KBoards, and elsewhere that Amazon has adopted a new policy where some romance titles, most notably those titles that Amazon has identified as erotica, have been removed from the Kindle Store best-seller listing .” Amazon’s changes began on March 22.

Delisting titles from the Amazon Kindle store essentially inters them totally, leading to massive revenue loss for indie authors. One author received a note from KDP- Kindle Direct Publishing- discussing the changes 😛 TAGEND

I’m following up concerning some of your books missing their best sellers ranking.

After hearing from our technological squad we have confirmed that this is due to a recent update to the filter option for Erotica ebooks.

All adult themed titles is likely to be filtered from the main category marketings rank as part of this update. However, you will still continue to keep all of your category rankings. I know this wasn’t the answer you were looking for but appreciate your understanding on this policy.

Please let us know if you have any further questions.

The FOSTA Bill is ostensibly about avoiding online sex trafficking and has already caused Craigslist to shut down its online personals. However, it can also be construed as a bill that prevents sexual material of all kinds from receiving ready distribution online, a fact that is giving some big content providers pause. The Digital Reader notes that” the change in policy only affects the main Amazon site, and not other sites like Amazon UK .”

I have reached out to authors and Amazon for further comment.

UPDATE- An Amazon spokesperson wrote:” A recent Kindle Store change inadvertently affected the showing of marketings rank for some titles. We have corrected this issue .”

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Microsoft launches AI and entry-level software development courses

Microsoft today launched two new courses in its online education program for developers: an entry-level software growth class and an AI course for more advanced developers who want to expand their knowledge of machine learning.

It’s no secret that there aren’t enough data scientists and machine learning developers available to fulfill the current demand. It’s no surprise, then, that a number of big companies have started to teach the fundamentals of these disciplines to their existing employees; starting today, anybody can take the AI courses that Microsoft first developed for its own employees.

The Microsoft Professional Program for Artificial Intelligence is available for free on, though you can also opt to pay for a certification. Each course runs three months and starts at the beginning of the quarter. Unsurprisingly, there’s a bit of a focus on Azure and Microsoft’s Cognitive Services here( and you need an Azure account ), but otherwise the course is agnostic to the operating system you run.

The overall program consists of 10 courses that range from introductions to AI and Python for data science to a class on ethics for AI developers and lots of hands-on work with develop models. Most of the 10 required courses should take about eight to 16 hours to complete.

In addition to the AI class, Microsoft also today announced a similar program for entry-level software developers. This edX-based program consists of 13 courses that teach students the basics of software developing, with a focus on Python and JavaScript. What’s maybe more important than just teaching those languages, though, is that the course also looks at basics like data structures and how to use GitHub and other tools to write code professionally.

These two new courses join a growing number of similar programs in Microsoft’s so-called ” Professional Program“( why they don’t only call it the Microsoft Academy is beyond me, but I’m not a marketer …). These existing courses range from front-end developing classes to a program for cloud admins and a course for IT subsistence professionals.

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Microsoft can ban you for using offensive language

A report by CSOOnline presented the possibility that Microsoft would be able to ban” offensive speech” from Skype, Xbox, and, inexplicably, Office. The post, which cites Microsoft’s new words of use, said that the company would not allow users to” publicly showing or use the Services to share inappropriate content or material( involving, for example, nudity, bestiality, porn, offensive speech, graphic violence, or criminal activity )” and that you could lose your Xbox Live Membership if you curse out a kid Overwatch.

” We are committed to providing our customers with safe and secure experiences while using our services. The recent changes to the Microsoft Service Agreement’s Code of Conduct provide transparency on how we respond to customer reports of inappropriate public content ,” told a Microsoft spokesperson. The company notes that” Microsoft Agents” do not watch Skype calls and that they can only respond to complaints with clear evidence of abuse. The changes, which go into effect May 1, lets Microsoft to ban you from it services if you’re detected passing” inappropriate content” or employing” offensive language .”

These new regulations give Microsoft more power over abusive users and it seems like Microsoft is cracking down on bad behaviour on its platforms. This is good news for victims of abuse in private communications channels on Microsoft products and may dedicate trolls pause before they scream something about your mother on Xbox. We can only dare to dream.

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Microsoft revamps its startup programs with $500M commitment and new co-selling program

Over the last few years, Microsoft has launched a number of programs for startups that range from free BizSpark credits for Azure and Microsoft’s developer and productivity tools, to Microsoft Ventures and the Microsoft Accelerator programs around the world. These different programs never quite told a cohesive tale about Microsoft’s commitment to startups, though. Now, however, the company is launching Microsoft for Startups, a program that aims to bring technology and marketing expertise to startups and that — maybe most importantly — includes a co-selling program that allows startups to piggyback on Microsoft’s existing sales force.

In addition, Microsoft is tweaking some of its existing programs to better support the startups in its ecosystem.

In total, Microsoft is perpetrating $500 million over the course of the next two years to operate joint marketings engagements and offer to startups access to technology and community spaces.

But let’s get the bad news out of the style first: The number of credits for startups in the BizSpark and BizSpark Plus program will go down( though not for startups currently enrolled in these programs ). Microsoft argues that this isn’t a big deal, though, and that its free offerings are still competitive with those of its rivals.

Charlotte Yarkoni, Microsoft’s corporate VP of growth and ecosystem, told me that she spent quite a bit of day with startups in and outside of the Microsoft ecosystem after she took this new role about a year ago. What she heard wasn’t that startups wanted more free credits — instead, they wanted more help from Microsoft to bring their products to market.

At the same time, Microsoft was also looking for ways to differentiate its startup programs from those of its challengers. “We started building around this concept of helping to broaden the reach for startups and go beyond the typical cloud credits to how we build a different program, ” said Yarkoni. “How can we evolve our accelerator program and pull that forward and also think through how we can construct more of a campus and neighborhood feel.”

The result of this is Microsoft for Startups, which includes a number of different components. The first is an expansion of the Microsoft Reactors project. These are physical spaces where entrepreneurs, developers, investors and others can meet and where Microsoft hosts a number of different social events and classes. Microsoft currently operates these in Redmond, Seattle, San Francisco and New York. It’s now looking to open new ones in London, Sydney, Tel Aviv, Berlin, Shanghai and Beijing, and Yarkoni tells me that it may move its existing Reactors to larger spaces as their leases come up.

Microsoft Ventures, the company’s vehicle for investing in startups at the Series A to D stage, won’t assure any major changes. “Ventures continues to expand and is run by a squad that is very focused on our near-, mid- and long-term horizon requires, ” Yarkoni said. “That program continues on as it is.”

The largest change will come to the Microsoft Accelerators program. This program is now called Microsoft ScaleUp, and for those working startups that qualify for it, this program will now include the option of co-marketing and co-selling through Microsoft’s marketings force.

“We tried to build a style to plug our startups into our marketings engine, ” Yarkoni said. Startups will get all the usual accelerator benefits, including access to Microsoft’s technology and expertise, but in addition, Microsoft is training and incentivizing its own vendors to sell these startups’ tools to its customers. These startups do need to be ready for this, of course, and for the most part, we are talking about B2B startups here that target the enterprise market.

One of the first companies in this program, which Microsoft has been softly testing for a few months now, is the marketing intelligence platform Affinio. Affinio CEO Tim Burke, whose company went through the Microsoft Accelerator program in Seattle in 2016, told me that Microsoft is not just dedicating his company a clear playbook to follow, but also providing help with creating collateral like content, example surveys and video content. He also stressed that Microsoft didn’t only give him a checklist to follow but that he had plenty of check-ins and meetings with Microsoft to push this ahead. “The unique thing with this is that Microsoft has this down to a science — all the way down to the playbook, ” Burke said. He also stressed that he has find a shift in how Microsoft approaches startups. “You can see and feel the shift, ” he told me. “It’s astounding how the organization as a whole has bought in. Everybody knows the goal and direction.”

Affinio, which largely targets larger enterprises, has already made a sale through this program, with 20 more in the pipeline. The plan is to push more than 100 sales opportunities into this system by the end of the quarter.

This is obviously exactly the success tale that Yarkoni is talking about. It’s worth mentioning that this isn’t Microsoft’s first foray into cross-selling third-party products. It also recently launched a somewhat similar program for ISVs, and it’s taking its lessons from this to Microsoft for Startups.

Just as important as this new project, though, is the overall revamp of Microsoft’s startup programs. Instead of the somewhat scattershot approach it adopted a few years ago, it looks like Yarkoni plans to make this program into a more cohesive project that devotes startups more incentives to work with Microsoft( and potentially Azure, Teams, Visual Studio and its other tools) at an early stage.

For the longest time, startups have also been somewhat wary of working with Microsoft, which wasn’t always known as being the easiest company to work with. At the same period, competitors like Google have been expanding their work with startups through similar accelerator programs. A bit of competition here is surely going to help founders in the long run.

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