Microsoft and Xiaomi team up to produce smart speakers, laptops, and more

Microsoft and Xiaomi have signed a Strategic Framework Memorandum of Understanding to deepen the partnership between the two companies and to work together on future A.I.-powered products and software.

Microsoft has agreed to allow Xiaomi to use its cloud computing products, such as Azure, to create a line of smartphones, laptops, and other smart devices for an international market.

The details of the agreement have not yet been announced, but the press release says that one of the projects being considered is a Cortana-powered Mi AI speaker. The Mi AI is a budget-conscious smart speaker similar to the Google Home or Amazon Echo. Currently, the only Cortana-powered smart speaker on the market is the Harmon Kardon Invoke.

The Invoke currently costs around $150, putting it in a similar price tier as the Amazon Echo. The current version of the Mi AI costs about a third of that price, though its availability is limited outside of China.  It is likely that a Cortana-powered version would be marketed more aggressively in the west.

Microsoft and Xiaomi are also discussing plans to integrate other Microsoft software into Xiamio products such as Bing, Edge, Skype, along with improved A.I. functionality. The details of these plans have not yet been revealed.

The fact that these companies decided to go with a Memorandum of Understanding is also important, as it means that the agreement is not legally binding. It is also unclear what, if any, financials are involved in this program.

Regardless of the specifics, this deal has the potential to benefit both companies. Access to Microsoft’s A.I. and cloud computing technology could provide a boon for Xiaomi as it works to develop new hardware. Additionally, it might give the company greater access to western markets.

Microsoft, on the other hand, is likely hoping to leverage its partnership with Xiaomi to earn a foothold in the lucrative Chinese market. China can be difficult for foreign tech companies to break into, thanks to a combination of a highly competitive market and government policies.

This is not the first time that these two companies have worked together. In 2015, they signed a deal to test Windows 10 on Xiaomi devices.

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