Alexa and Cortana’s marriage brings risks and rewards for Amazon and Microsoft

In what could prove to be a seminal moment, Amazon and Microsoft — two major combatants in the war being waged by tech giants who want their AI assistants in electronics of all kinds — have joined forces. Later this year, Alexa will be available on Windows 10 PCs and Cortana will be available on the most popular Alexa-enabled devices from Amazon, like the Echo, Echo Dot, and Echo Show.

To be clear, this isn’t a merger of the two AI assistants. It’s an integration that grants guest access. By saying “Cortana, open Alexa,” you can launch one of more than 18,000 Alexa skills or buy groceries, and by saying “Alexa, open Cortana,” you can sift through your emails.

The two companies have been working behind the scenes on a partnership since May 2016, according to the New York Times. This suggests that they could introduce further integrations and cross-pollination in future.

This upcoming integration, and the challenge it presents to competitors like Google, Apple, and Samsung, could reshape the AI assistant landscape and what consumers expect from devices with AI inside. We don’t yet know to what extent Microsoft and Amazon will work together on this, or how competitors will respond to calls for interoperability made by Microsoft CEO Satya Nadella and Amazon CEO Jeff Bezos, but here are some potential risks and rewards of the current deal.

Rewards

Both Cortana and Alexa will soon be available on tens of millions of devices

The most important reward may be the simple fact that this deal brings together the leader in smart speaker sales with the leader in AI assistants on personal computers.

As of this spring, Windows 10 with Cortana had been installed on more than 500 million devices. Amazon, meanwhile, had the most popular smart speaker, though the company famously doesn’t share sales numbers. By comparison, in the same time period, Google Assistant was on 100 million devices and Apple’s Siri was on 375 million devices.

Amazon has said “millions” of Alexa devices were sold last holiday season and that Echo Dot was the most popular item sold on Prime Day last month. Estimates by voice analytics company VoiceLabs say Amazon will sell nearly 25 million Alexa-enabled devices in 2017, while this spring eMarketer predicted Amazon would account for roughly 70 percent of all U.S. smart speaker sales. Making Alexa and Cortana available together could be a potential selling point for both Echo smart speakers and Windows PCs.

If you’ve got a Windows PC and an Alexa smart speaker already, this probably doesn’t matter a whole lot to you, but it has the potential to change the way hundreds of millions of people interact with AI assistants.

Business partners can be in two places at once

As Amazon and Microsoft work with businesses or make digital services available through their AI assistants, partners know they can potentially move onto tens of millions of additional devices, creating more incentive to work with Amazon or Microsoft as opposed to their competitors.

Microsoft and Amazon can focus on what they know best

As Amazon CEO Jeff Bezos said in a statement, “There are going to be multiple successful intelligent agents, each with access to different sets of data and with different specialized skill areas. Together, their strengths will complement each other and provide customers with a richer and even more helpful experience.”

A deeper integration of the two bots could allow Microsoft and Amazon to focus on their strengths and core businesses. Both assistants can do a lot today, from telling jokes and creating calendar events to letting you make purchases with your voice, but should they choose to do so, they can stop being generalists. Microsoft can go deeper into areas like helping with emails, business and enterprise services, and the kinds of things you may be more likely to do on a personal computer. And Amazon can get better at shopping and growing its third-party voice app ecosystem.

You can imagine Cortana soon delivering meeting and email summaries or entering the workplace in a bigger way, while Alexa could act as an in-store Whole Foods shopping assistant or the voice of personal or delivery drones.

Seattle could become ‘Voice City’

Ahead of the launch of the Alexa startup accelerator earlier this year, managing director Aviel Ginzburg said he wanted to make Seattle “Voice City,” a place that attracts leading minds in the field and startups looking to create amazing or practical, valuable experiences.

Right now, Amazon and Microsoft are only talking about working together by making Cortana and Alexa each other’s guests, but should the two companies decide to partner on some of their initiatives to support the development of voice computing, like the $100 million Alexa Fund or the Alexa Accelerator, Microsoft and Amazon could well make Seattle the center of conversational computing.

More engaging conversational AI

Amazon and Microsoft have demonstrated an outsized interest in bots that can carry on a conversation, not just connect with some cool SaaS integration or tell you jokes. Amazon has initiatives like the Alexa Prize, which entices developers to create more friendly bots, and while it’s not quite Scarlett Johansson in Her, you can test bots that try to maintain 20 minutes of conversation by saying “Alexa, let’s chat.” Microsoft, meanwhile, has built its own talkative bots, including Zo, Tay, and Xiaoice.

The two assistants already have a rapport going, although it seems a bit one-sided. When you ask your Amazon device “Alexa, do you know Cortana?,” it coyly answers with a statement such as “We’ve been hanging out more lately.” But when you ask Cortana, “Hey Cortana, do you know Alexa?,” it responds, “I don’t know Alexa, but I’ve heard of Alexa. If you have Alexa, I may have just triggered Alexa. If so, sorry Alexa.” To which your Echo might respond, “No worries.”

If the two chose to together create AI assistants that are both powerful and chatty, they could decide to make conversational prowess their distinction, not for novelty but for results.

Microsoft insists that conversational bots maintain higher levels of engagement than bots that just respond to voice commands, and more than 90 percent of Alexa skills fail to attract return visitors after their first week of activity. This lack of engagement may be why Amazon just started paying Alexa developers that create the most engaging skills.

Siri, Google Assistant, and other competitors step their game up

Apple and Google have not yet said whether they would consider a similar partnership. But when two of your biggest competitors team up, you’ve got to respond in some fashion.

Everyone who likes voice-powered AI assistants should be excited to see how Alexa and Cortana’s rivals respond, not just those available today but also those to come. Facebook, for example, is reportedly working on a smart speaker and video chat device that may rival Amazon’s Echo Show.

“It’s all good news for end-users because it shows how the giants of Intelligent Assistance will continue to up the ante when defining the capabilities of popular assistants. Amazon and Microsoft contend directly with Google, Apple, Facebook, and Samsung, and each of them has the wherewithal to fund continuous improvement,” wrote Dan Miller of Opus Research, a conversational commerce and AI assistant analysis firm. “A precedent has been set for individuals to pick their preferred interface without limiting their access to the wide world of information, services, and social graphs that are vital to their lives.”

Risks

Potentially limits the possibility that both companies will branch out

Does making a partnership like the kind Microsoft did today limit or increase the potential that Microsoft will sign deals with companies like Walmart, as Google Assistant did a few weeks ago? We don’t yet know to what extent this partnership will shape the business dealings of either company.

Stifle the growth of the Cortana third-party skills ecosystem for Microsoft

Amazon has a big head start on Microsoft when it comes to voice apps, now counting more than 18,000. Microsoft, on the other hand, has released no official stats on the growth of Cortana’s third-party ecosystem. Why bother with Cortana skills if there’s so much more available in the Alexa Skills Store?

Sorry, Harman

Not a risk so much as a result. The Harman Kardon Invoke smart speaker was slated to be the first with Cortana inside. It may technically be the first out since Harman’s speaker is expected to arrive in the coming weeks and the Alexa-Microsoft partnership may not begin until the end of the year, but the news today ensures that anyone who was considering the purchase of an Invoke smart speaker would just buy an Echo device instead. Consumers’ motivation to buy any Cortana-powered smart speaker could be forfeited with this deal.

Bad pet names

Depending on who you are, you may think of this as a good or bad thing. I’m going to go with bad. Like JLo and Ben Affleck became Bennifer and Brad Pitt and Angelina Jolie were referred to as Brangelina, AI assistants can get bad pet names, too. The partnership news was only a few hours old before MSPowerUser began referring to the pair as AlexTana. Of course, it’s not the end of the world if your device gets a silly pet name like a celebrity power couple, but Alexa and Cortana are as much a marketing tactic for tech companies and their proprietary services as they are personal assistants. Muddying the waters around that name probably isn’t what either of these companies wants.

This partnership seems rather unique, at once a call to bring AI assistants together, an endorsement for specialization, and a challenge to Google and Apple by two companies that missed the mobile revolution. Cortana and Alexa apps are available on iOS and Android phones, but the idea of interoperability between AI assistants at this scale is new. Not enough is known yet about how or even if this partnership will extend beyond guest access, but however it turns out, it’s a pact that will almost certainly change the way we think about what an AI assistant can do.

Correction: The original version of this article stated that the Alexa Fund is $150 million, however the fund for seeding the Alexa ecosystem and the advancement of voice computing is actually $100 million.