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Ride-hailer Grab to pick up Microsoft as investor, fueling AI

Joint projects are to include image recognition and a chatbot

Grab aspires to become what it calls an "everyday superapp" -- an effort that requires new technology.   © Reuters

SINGAPORE -- Microsoft is poised to take a stake in Southeast Asia's largest ride-hailing operator Grab, in a strategic partnership to develop artificial intelligence and other data-driven technologies.

Microsoft will join an expanding list of investors in Grab, which includes Japan's SoftBank Group, Toyota Motor, China's Didi Chuxing as well as Ping An Capital. Uber Technologies also acquired a stake in Grab this year in exchange for its Southeast Asian business.

Grab has not disclosed the amount of the Microsoft investment, but it said the money will be part of $1 billion in fundraising Grab is expecting by the end of this year.

According to a Grab spokesperson, the company will use the money to expand its nontransport businesses such as food delivery and payment. It will also continue to invest in the Indonesian market, the largest economy in the region.

But the key areas of the partnership will likely be technologies centered on AI and big data. According to their joint announcement, planned projects include image recognition technologies that will improve the pickup service. Passengers will be able to take a photograph of their current location and have it translated into an actual address for the driver, the companies said.

Improving Grab's mapping quality as well as providing an AI chatbot are also on the agenda. In addition, the two companies will collaborate on the deployment of in-car entertainment.

"This partnership signals a deep collaboration with Microsoft on an array of technology projects, including big data and artificial intelligence, that will transform the delivery of everyday services and mobility solutions in Southeast Asia," Grab President Ming Maa said in a statement.

As ride-hailing competition is expected to intensify, Grab has been increasingly investing in AI and data technologies to enhance its services. In July, Grab established an AI laboratory with the National University of Singapore, to develop algorithms that would better predict traffic congestion and better match riders and drivers.

To spearhead technology development, Grab last year hired a former Microsoft engineer, Theo Vassilakis, as chief technology officer. The partnership with Microsoft could help Grab develop more tech talent necessary for expansion.

Since Grab is transforming itself from a ride-hailing app into what it calls an "everyday superapp" -- a platform for various digital consumer services -- acquiring diverse new technologies is considered key.

For Microsoft, the partnership with Grab would lead to more opportunities in Southeast Asia. Under the arrangement, Grab will adopt Microsoft's cloud computing platform, Microsoft Azure, as its preferred platform.

"Our partnership with Grab opens up new opportunities to innovate in both a rapidly evolving industry and growth region," Peggy Johnson, executive vice president at Microsoft, said in a statement. Microsoft also invested in Uber in 2015.

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