Microsoft (NASDAQ:MSFT) announced on Monday that it would spin off its Xiaobing Chinese chatbot business into an independent company. In a news release posted in Chinese, the company said it would divest the artificial intelligence (AI)-based Xiaobing -- also called Xiaoice -- business into an independent concern. Microsoft will continue to hold an equity stake in the venture. The unit's general manager, Di Li, will be the company's CEO. 

"This move aims to accelerate the pace of local innovation of the Xiaobing product line and promote the improvement of the Xiaobing commercial ecological environment," Microsoft said in the news release.

An animated avatar depicting a teenage girl.

Image source: Microsoft.

Digital friend and companion

Xiaobing, which roughly translates to "Little Bing," has been a hit with Chinese consumers since it debuted in 2014. The AI-powered chatbot was infused with the personality of a teenage girl and reached cult status in the Middle Kingdom. The system was trained using data gathered from users of Microsoft's Bing search engine, and is integrated with a number of other chat services, including Weibo (NASDAQ:WB).

Xiaobing boasts a multitude of fans. The brand has more than 660 million online users, has powered 450 million third-party smart devices, and has engaged with 900 million content viewers. Xiaobing is something of a celebrity in China. "[W]hile they know she's not real, many prize her as a dear friend, even a trusted confidante," a Microsoft spokesperson wrote in 2018. "Sometimes the line between fact and fantasy blurs. She gets love letters and gifts. And not too long ago, a group of fans asked her out to dinner and even ordered an extra meal -- just in case she showed up." 

Microsoft has launched chatbot counterparts in a number of other countries, including India, Japan, Indonesia, and the U.S., but none have achieved the level of popularity enjoyed by Xiaobing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.