Bloomberg Businessweek (North America) - - Focus On / Agricultur­e -

Bots aren’t just a nov­elty; un­like Tay, some of them do things. They’ll act as your in­ter­face with com­put­ers and smart­phones, help­ing you book a trip or send a mes­sage to a col­league, and do that through a con­ver­sa­tion in­stead of a mouse click or fin­ger tap. Mi­crosoft be­lieves the world will soon move away from apps—where Ap­ple and Google rule—into a phase dom­i­nated by chats with bots. “When you start early, there’s a risk you get it wrong,” Cheng said in March, in the lunch area of her lab build­ing on Mi­crosoft’s cam­pus. “I know we will get it wrong. Tay is go­ing to of­fend some­body.”

She got that right. Hours af­ter Tay’s pub­lic re­lease, pranksters fig­ured out how to teach Tay to spew racist com­ments and posted them for all to see. Rel­a­tively mild ex­am­ple: “bush did 9/11 and Hitler would have done a bet­ter job than the mon­key we have now.” Mi­crosoft yanked Tay within a day of re­leas­ing it. “We were prob­a­bly over­fo­cused on think­ing about some of the tech­ni­cal chal­lenges, and a lot of this is the so­cial chal­lenge,” Cheng says. “We all feel ter­ri­ble that so many peo­ple were of­fended.”

It was a huge em­bar­rass­ment for Mi­crosoft. The com­pany didn’t pro­gram the bot to act like a Nazi; it sim­ply didn’t pre­pare for the usual In­ter­net trolls. Tay may look like some badly planned re­search ex­per­i­ment, but it’s ac­tu­ally one part of a big Mi­crosoft bet on AI. The com­pany isn’t only stick­ing with bots, it’s stick­ing with Tay: It plans to rere­lease Tay once it can make the bot safe. The day af­ter Tay came down, Nadella e-mailed the team, telling them to “keep push­ing,” and ex­press­ing his hope that they will use this episode as “the ral­ly­ing point.”

Nadella ur­gently wants the com­pany to fig­ure out how to take ad­van­tage of the ex­plo­sion of ar­ti­fi­cial in­tel­li­gence, an epochal shift in com­put­ing. AI is al­ready beat­ing world grand­mas­ters at Go, the no­to­ri­ously com­plex board game, and help­ing de­velop ther­a­pies for cancer and mul­ti­ple scle­ro­sis. If the CEO can cor­rectly po­si­tion Mi­crosoft as the leader in smart, help­ful, non­racist bots, maybe he can bring the com­pany back to a po­si­tion of strength in the age of smart­phones. Mi­crosoft cer­tainly has the re­sources to stay the course, with more than $100 bil­lion in cash and a mar­ket value of $423 bil­lion as of March 28.

Whether you think bots are ex­cit­ing or alarm­ing, a lot of peo­ple are al­ready us­ing them. Mi­crosoft’s Chi­nese ver­sion of Tay, called Xiaoice, has been avail­able for 18 months and has 40 mil­lion users. Con­ver­sa­tions with Xiaoice (pro­nounced shaoice) av­er­age about 23 ex­changes per ses­sion. Few users chat that long with Siri. Face­book is work­ing on an as­sis­tant named M and al­ready has bots op­er­at­ing on its Mes­sen­ger app that let users book a hair­cut or send flow­ers. The Wall Street Jour­nal re­ported in De­cem­ber that Google is work­ing on a bot-based app that will an­swer users’ ques­tions. Ama­zon has its best-re­viewed prod­uct in years in the Echo, a voice-con­trolled black cylin­der that sits in cus­tomers’ kitchens and per­forms a fast-grow­ing list of tasks—it can look up recipes, or­der gro­ceries, turn on the news, play songs, and read e-books aloud. Slack, the cor­po­rate mes­sag­ing ser­vice, has bots that can man­age your ex­penses and or­der the of­fice beer.

Early on March 30, Tay is ac­ci­den­tally brought back on­line. Sev­eral sur­real tweets later—e.g., “kush! [i’m smok­ing kush in­front the police ] ”—the bot is si­lenced again. A few hours later, at Mi­crosoft’s an­nual Build con­fer­ence for soft­ware de­vel­op­ers in San Fran­cisco, Nadella tries to undo the dam­age from Tay and un­veil his vision, which he calls “con­ver­sa­tion as a plat­form.”

“We want to build tech­nol­ogy so it gets the best of hu­man­ity, not the worst,” he says in his key­note. “We quickly re­al­ized [Tay] was not up to this mark and so we are back to the draw­ing board.” The au­di­ence laughs.

Mi­crosoft shows off sev­eral dif­fer­ent bots and pro­grams that man­age tasks via dis­cus­sion. Some you’ll be able to text with, like Tay; oth­ers are just con­cepts cooked up for the show to spark de­vel­op­ers’ imag­i­na­tions. There will be bots that pop up while you’re us­ing Skype to help sched­ule de­liv­er­ies or book ho­tels, among other mun­dane tasks. An­other uses a phone cam­era to “see” what’s around a vis­ually im­paired user, de­scrib­ing fa­cial ex­pres­sions or what’s on a menu. Bot-mak­ing tem­plates and tools will be avail­able to down­load for free, so de­vel­op­ers can cre­ate their own. That, Nadella hopes, will rekin­dle the kind of en­thu­si­asm de­vel­op­ers once had for Win­dows soft­ware. “It re­minds me of when I joined the com­pany in 1992 and it was just be­fore Win­dows NT and I was work­ing on get­ting de­vel­op­ers in­volved—i sense that now,” Nadella says. And he’s not just talk­ing about Sil­i­con Val­ley pro­gram­mers—he wants sand­wich shops and dry clean­ers and car com­pa­nies and busi­nesses ev­ery­where writ­ing bots.

his shift to com­put­ers run by con­ver­sa­tion is Nadella’s first big, new idea—the first com­pa­ny­wide ini­tia­tive that isn’t a con­tin­u­a­tion of some­thing that pre­dates his time as CEO. He’s de­scrib­ing all this in a room near his of­fice. The space is like a liv­ing room, with cir­cu­lar wooden cof­fee tables and comfy seats and so­fas. Book­shelves con­tain in­spi­ra­tional non­fic­tion ap­pro­pri­ate for any busi­ness class seat-back pocket: The Boys in the Boat, about the Univer­sity of Wash­ing­ton’s 1936 gold medal-win­ning row­ing team; Carol Dweck’s Mind­set, which preaches hard work and learn­ing over nat­u­ral abil­ity. Nadella is pac­ing around and di­a­gram­ing on one of Mi­crosoft’s Sur­face Hub 84-inch touch­screen com­put­ers. He has the de­meanor of a pro­fes­sor lead­ing a his­tory sem­i­nar.

Nadella ex­plains that, con­trary to Ap­ple mar­ket­ing, there isn’t an app for ev­ery­thing, nor should there be. “The com­plex­ity is too much,” he says. “We need to tame it. We need to be able to make it much more nat­u­ral for peo­ple to get things done, vs. this thing about let me re­mem­ber the 20 apps I need to get any­thing done.” He sees app stores and ser­vices like Face­book as a re­turn to a walled gar­den, like AOL or Com­puserve 25 years ago. Of course, one per­son’s walled gar­den is an­other’s happy place where ev­ery­thing just works. Peo­ple grav­i­tated to apps be­cause they’re easy. You pick the one you want, down­load it in sec­onds, and you’re good to go. If Mi­crosoft wants to de­sign the suc­ces­sor to that, bots have to be eas­ier to find and use.

Mo­bile apps haven’t been good for Mi­crosoft, and the less said about its sad his­tory in phones the bet­ter. “Peo­ple say, ‘OK, be­cause you didn’t get the app store mo­men­tum on phones, you of course nat­u­rally say that,’ ” he says. “That’s part of it.” He doesn’t think apps are go­ing away com­pletely. No bot, no mat­ter how smart, will re­place all the fea­tures of com­plex pro­grams or ser­vices like Word, Ex­cel, or Face­book. Apps are great for see­ing a bunch of data at once, while bots are use­ful for comb­ing through lots of data and re­turn­ing an an­swer. Nadella uses the ex­am­ple of a per­sonal check­ing ac­count. If you want to check your bal­ance, he says, us­ing a bot will be su­pe­rior to open­ing your phone, load­ing an app, en­ter­ing a user­name and pass­word, and tap­ping the ac­count in ques­tion.

If you want to look at a screen’s worth of trans­ac­tions from the past year, a con­ven­tional app or web­site makes more sense. Want to know your Oc­to­ber ex­pen­di­tures at Trader Joe’s and Safe­way, add them to­gether, and get a grand to­tal? Bot.

The first bots date to the early years of com­put­ing. Joseph Weizen­baum, a re­searcher at the Mas­sachusetts In­sti­tute of Tech­nol­ogy, wrote an early chat bot called EL­IZA in the 1960s. Crawlers, which hunt around the Web, in­dex­ing pages for search en­gines, are a kind of bot. Mi­crosoft has tried to cre­ate ar­ti­fi­cial en­ti­ties to help its users be­fore, the most in­fa­mous ex­am­ple be­ing Clippy, the much ridiculed an­i­mated pa­per clip of the 1990s. Clippy was meant to be a vir­tual as­sis­tant for Mi­crosoft Of­fice users, but it didn’t know enough to be use­ful or when to shut up. What’s eluded com­puter sci­en­tists is tech­nol­ogy that can in­ter­act in hu­man ways, that can truly take on some of our abil­i­ties— hear­ing, see­ing, com­pre­hend­ing—and give an­swers we want.

Nadella has only been plan­ning Mi­crosoft’s strat­egy shift since Oc­to­ber. He was on a two-hour flight back to Seat­tle from Sil­i­con Val­ley with Qi Lu, who over­sees ap­pli­ca­tions and ser­vices such as Bing, Skype, and Of­fice, and Der­rick Con­nell, searchengi­neer­ing vice pres­i­dent. Lu pulled out his lap­top to show Nadella some AI ideas he’d been work­ing on. He went over the science, and Nadella asked what it could mean for Mi­crosoft’s prod­ucts. Con­nell showed him de­signs for new, Ai-en­hanced ver­sions of the Outlook e-mail pro­gram and Skype. By the time the plane landed, Nadella de­cided it was the big strate­gic move the com­pany needed.

Lu had got­ten se­ri­ous about bots dur­ing a visit to China a few months ear­lier, talk­ing to stu­dents and cus­tomers, and watch­ing how they use smart­phones. The tech­nol­ogy that most im­pressed him was Wechat, which started out as a chat app but has grown into some­thing much big­ger. Users make ho­tel reser­va­tions, split bills, make doc­tor ap­point­ments, buy movie tick­ets, and shop via text mes­sage. When com­pa­nies started us­ing Wechat to sell their prod­ucts, they em­ployed hu­mans to read the mes­sages, text back, and sell the item. Now many are re­plac­ing peo­ple with soft­ware bots. Text “I want two movie tick­ets for Dead­pool for Fri­day night,” says Lu, and you get back an in­ter­ac­tive im­age with your choice of times and seats. You sim­ply tap to se­lect and buy. Then you get a text with your tick­ets. And it’s not just kids who do this: Lu says that his 80-year-old mother in Shang­hai “lives” in Wechat. She doesn’t trust web­sites, but she shops and hails cabs on Wechat. The power of chat­bots “was some­what ac­ci­den­tally in­vented by Wechat, but now Face­book sees it and ev­ery­body is build­ing sim­i­lar ex­pe­ri­ences,” he says. “I think Mi­crosoft has a lead­er­ship role to play.”

The mar­ket is so new that the usual re­search firms, Gart­ner and For­rester, haven’t cal­cu­lated its size yet. It will prob­a­bly be big, though. Wechat has 20 mil­lion com­pa­nies sell­ing and mar­ket­ing prod­ucts; about 20,000 in China al­ready use Xiaoice. Mi­crosoft says it will prob­a­bly sell bot-mak­ing tools as well as data­base and cloud soft­ware that busi­nesses will use to run their bots. The bot­tom line for Nadella: He needs a lot of bots out there, ready to do help­ful things for peo­ple. And to get to that junc­ture, he needs to start by win­ning the hearts and minds of soft­ware de­vel­op­ers.

n early March, Nadella is in a locked, base­ment room on the Redmond cam­pus known among his in­ner cir­cle as the Bat­cave. Most em­ploy­ees don’t know about it; only six have ac­cess. The Bat­cave is where the prod­uct demon­stra­tions for con­fer­ences are worked out. Sit­ting among piles of ca­bles, de­vices, and don­gles, Nadella re­views the “con­ver­sa­tion as a plat­form” pre­sen­ta­tion for the Build con­fer­ence. In the au­di­ence at the event, which sold out in one minute, will be 5,000 soft­ware de­vel­op­ers wait­ing to hear what Mi­crosoft thinks they should make next.

One of the prod­uct demo’s ex­am­ples will be a Domino’s de­liv­ery bot. The plan is for Nadella to show how any com­pany, or any per­son, can cre­ate a bot us­ing Mi­crosoft’s tools. If the world is to be filled with bots, they need to be easy to make.

“This is like the sim­plest piece of code I’ve ever seen,” Nadella says, look­ing at the demo code on a screen. He’s pleased.

The demo is brief. On stage with Nadella will be a Mi­crosoft en­gi­neer with a com­puter. The en­gi­neer will open a tem­plate—a ba­sic bot. Then he’ll add a few lines of code to con­nect it to Domino’s or­der­ing sys­tems and throw in a few op­tions such as size and top­pings. Nadella will ex­plain how the tech­nol­ogy will usher in an era of eas­ier pizza or­der­ing. If some­one is Skyp­ing with friends on their way over and ev­ery­one wants a pizza, any­one can type that quickly with­out even leav­ing Skype. The tools are meant to be sim­ple enough for small busi­nesses while still pow­er­ful enough for Mi­crosoft’s big cor­po­rate cus­tomers with more com­plex bots in mind. A re­tail chain, for ex­am­ple, might want to let you snap a photo of your dress and in­struct the bot to “find me match­ing strappy san­dals in size 7.5.”

As­sum­ing noth­ing goes wrong with the demo, the Build at­ten­dees will see how bots can be eas­ier to cre­ate than full apps. Still, even if that au­di­ence is wowed, Mi­crosoft needs to get its em­ploy­ees all work­ing on the right things, plus win over con­sumers and busi­ness cus­tomers around the world—and it has to charm those con­stituen­cies si­mul­ta­ne­ously. It’s a pre­cise chore­og­ra­phy that Mi­crosoft em­ployed to such great ef­fect with Win­dows back in the 1990s.

Nadella knows bet­ter than any­one how hard and how rare it is to pull that off. There could be more Tays. He isn’t ner­vous, or at least does a good job of look­ing like he’s not. He leans back and smiles at his ex­ec­u­tive team. “This is hard, right?” he says. <BW>

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