Microsoft shows what it would be like to live in a world where A.I. is everywhere

At its big conference for developers on Monday, Microsoft executives were showing what it will be like to live in a world infused with artificial intelligence.

Cortana, the company's digital assistant and its rival to Amazon Alexa and Apple's Siri, is at the heart of Microsoft's effort to embed voice and image recognition into more of its services. Microsoft representatives demonstrated how artificial intelligence could help drones spot anomalies they see from above and recognize the people who come into a conference room for a meeting, speedily transcribing what they say.

Four years into his gig running Microsoft — and after initially proclaiming that the world is primarily mobile-first and cloud-first — CEO Satya Nadella is focused on expanding the powers of Cortana, which is embedded into Windows 10 and has nearly 150 million people using it every month.

But there are limitations, and among them is Alexa's popularity in the home through the Amazon Echo. Recognizing that Microsoft won't be supplanting Amazon, Nadella knows that people who use Cortana for core Microsoft services like email and scheduling need to be able to communicate using their home Echo devices.

"We want to make it possible for our customers to be able to get the most out of their personal digital assistants, not to be bound to some single walled garden," Nadella said, at the Build developer conference in Seattle, as the company demonstrated how consumers will be able to reach Cortana through Alexa, and vice-versa.

While Microsoft is highlighting the many ways Cortana can be used in the office, the company has yet to introduce a workplace-specific service, even though it could potentially be a way to pick up AI revenue from customers with tens of thousands of employees. It's yet another way that Amazon is out in front — in November, the company announced Alexa for Business, integrating AI into more of its enterprise services.

The competition doesn't end there. Apple, Facebook and Google have also been weaving AI into their business products, with varying degrees of success making money from them. If anything, Build is showing just how much Microsoft has to do to catch up.

In AI research, Google's parent Alphabet is generally viewed as the corporate leader. Last year Alphabet's DeepMind stunned the field when a computer system it built beat the world's top-ranked player of the Chinese board game Go.

And in the public cloud business, Amazon has a commanding lead, with 33 percent of the cloud infrastructure services market, compared with 13 percent for Microsoft, according to Synergy Research Group.

Microsoft still has a big advantage, in that it's been serving large enterprises with Windows, Office and data center software for decades. That customer base could be the key opportunity for building an AI business, just as it should enable Azure to win contracts from companies migrating to the cloud.