XiaoIce AI

XiaoIce, the AI chatbot spinoff of Microsoft, raises $138.4 million

Rebbeca Ren

posted on November 9, 2022 1:10 am

Chinese chatbot XiaoIce announced on Monday that it had raised 1 billion yuan ($138.4 million) in its latest funding round.

The funds raised will be used to accelerate the research and development of its "AI Being" technology and increase the adoption of its "digital employees," according to the company.

"AI Being" is a term created by the XiaoIce team in 2019 to refer to digital employees designed using AI technology to understand, interpret, and perform human communication and related tasks. So far, XiaoIce's "AI Being" technology has been applied in various scenarios, including the renowned virtual singer "Luo Tianyi" and Sequoia Capital China's first virtual analyst "Hóng".

XiaoIce, an AI framework with a girly personality and a stronger social and interactive nature, was introduced by Microsoft Research Asia in 2014. 

It was trained using data that Microsoft collected from internet users through the Bing search engine and works with a number of different chat platforms, such as WeChat and Weibo. After its release, it immediately became a phenomenon on China's social media.

In July 2020, Microsoft spun off the Beijing-based affiliate into a standalone company to continue serving existing users, while also looking to bring the technology to some companies in Japan and Indonesia.

Currently, Xiaoice is led by CEO Li Di, who previously served as general manager for Xiaoice in Microsoft’s Software and Technology Center of Asia; while Harry Shum, who formerly worked as executive vice president of Artificial Intelligence and Research at Microsoft, is serving as Xiaoice’s chairman. 

“AI Being” is seeing wider commercialization across many sectors in China. Xiaoice said last November that through partnerships with Xiaomi, Oppo, Vivo and others, it offers voice-activated virtual assistants in more than 1 billion personal smart hardware devices, including smartphones and smart speakers. It also has reached cooperative agreements with automaker BMW and electric car maker NIO.

In addition, Xiaoice has extended its tentacles into the metaverse. Last year, it launched an app that allows users to create their own AI friends and interact with virtual characters in immersive experiences. The app, named Xiaoice Island, integrates Xiaoice's abilities to let AI systems compose and sing songs, draw paintings, and edit videos.

The company previously raised an undisclosed amount at a $1 billion valuation in July 2021 in a Series A round led by private equity firm Hillhouse Capital, with participation from 5Y Capital, Neumann, IDG Capital and GGV Capital.