Microsoft has announced the acquisition of Berkeley AI startup Semantic Machines to bolster its AI offerings and build machines with an advanced system of interaction.

"We are excited to announce today that we have acquired Semantic Machines Inc., a Berkeley, California-based company that has developed a revolutionary new approach to building conversational AI. Their work uses the power of machine learning to enable users to discover, access and interact with information and services in a much more natural way, and with significantly less effort," Microsoft wrote in a blog post.

The acquisition is a major step for Microsoft as it looks forward to establishing a conversational artificial intelligence centre in California. A centre of excellence that will "push forward the boundaries of what is possible in language interfaces," says David Ku, AI and research chief at Microsoft, who further disclosed that the company’s designs feature machine learning structures which allow users to access, discover and interact with information seamlessly.

Semantic Machines has demonstrated potentials within four years of its existence by using a new approach to develop conversational AI. The company's team is made up of engineers, entrepreneurs and researchers with good records in developing AI. Some of the startup members include those that contributed to building AI technology for Siri and Larry Gillick; former Apple Chief Speech Scientist.

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Ku says the acquisition will provide Microsoft with the resources for building new AI language interfaces that can handle interactions naturally.

For more than two decades, Microsoft has shown so much ambition in conversational artificial intelligent demonstrated through research on the fundamental building blocks, the company reports. Microsoft visions a world where computers could see, hear vocal languages and understand humans. In 2016, the company released pre-developed Cognitive services for combing natural language understanding and speech recognition into intelligent assistants. It also introduced a framework for developing bots in a bold step towards achieving conversational computing. Microsoft says over one million developers are currently using both services which makes computing more conversational.

"We are further developing our work in conversational AI with our digital assistant Cortana, as well as with social chatbots like XiaoIce," Microsoft said.

Xiaolce users across the U.S., China, Indonesia, Japan, China and India has grown up to 200 million users and has completed more than 30 billion conversations, according to Microsoft. Xiaolce and Cortana which first add full-duplex voice sense to conversational AI system has already set landmarks in speech recognition for Microsoft. More development in the system will translate lots of breakthrough for Microsoft.

Microsoft reported last month that its digital assistants and chatbots can now perform interactive communication with humans, "session-oriented," no longer the traditional single question and answer.

Combining Microsoft's advances in AI with the technology from Semantic Machines would produce a powerful and productive conversational computing experience. That's definitely going to take us to a new level in AI systems.