Microsoft Corporation (MSFT) Buys AI Startup Bonsai

Microsoft Corporation (NASDAQ:MSFT) announced this week that it has acquired artificial intelligence startup Bonsai to help refine its A.I. offerings.

Terms of the deal weren’t disclosed, but CNBC has some info on how the small firm could have a major impact at Microsoft:

Bonsai’s software draws on a trendy approach called reinforcement learning, which involves training systems to yield better outcomes through trial and error. After experts highlight important areas in the data and train an AI model, it can be incorporated into corporate applications.

The system can be deployed atop Microsoft’s Azure public cloud. Microsoft will “make sure it’s running great on Azure,” Gurdeep Pall, the company’s corporate vice president for business AI, told CNBC in an interview.

The trick with A.I. is to not only come up with innovative strategies on how to use it effectively, but also to commercialize those efforts with products that customers are willing to buy. Amazon and Google are leading the charge in that area, with Microsoft clearly hoping its latest acquisition can help close the gap.

Microsoft Corporation shares rose $0.18 (+0.18%) in premarket trading Thursday. Year-to-date, MSFT has gained 20.17%, versus a 4.29% rise in the benchmark S&P 500 index during the same period.

MSFT currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 65 stocks in the Software – Application category.