Microsoft Focused on A.I. Investments

LAGUNA BEACH, Calif. -- Microsoft Corp.'s investments will remain focused on artificial intelligence technology said Peggy Johnson, the software giant's Executive Vice President in charge of Business Development.

"We have a big focus on AI," Ms. Johnson said Tuesday at The Wall Street Journal's WSJ D.Live technology conference, answering a question about what Microsoft sees as its biggest opportunities. She said the company had made about 18 acquisitions in the AI space over the past few years and has about 8,000 staff focused on that area after a reorganization announced last year.

Ms. Johnson said other areas drawing Microsoft's attention include quantum computing, gaming, and software as a service. "We look at everything," she said. "I look at growth for the company."

Microsoft invested in two large private technology companies this year, Indian e-commerce player Flipkart Ltd. and InsideSales.com Inc., according to Crunchbase. Its last big tech acquisitions included the $26 billion deal for professional networking site LinkedIn in 2016 and the $2.5 billion purchase of Minecraft videogame maker Mojang AB.

The level of technology mergers and acquisitions has been depressed in 2017 relative to recent years. "For bankers it's a tough environment," said Jennifer Nason, Global Chairman of Investment Banking for J.P. Morgan Chase & Co., speaking on the same panel. Ms. Nason cited high stock market valuations and uncertainty over tax policy as reasons for depressed tech M&A volumes.

The value of acquisitions announced for U.S.-based tech companies so far this year has amounted to $115 billion, according to research firm Dealogic. That is down from $280 billion by this point last year and $331 billion to this point in 2015, says Dealogic.

For its part, Microsoft will consider more partnerships in addition to investments and acquisitions said Ms. Johnson, pointing to a recent integration between Microsoft's Cortana smart assistant and Amazon.com Inc.'s Alexa. She said Microsoft would be open to similar partnerships with Alphabet Inc.'s Google and Apple Inc. so long as there is "shared value."

Write to Rolfe Winkler at rolfe.winkler@wsj.com

(END) Dow Jones Newswires

October 17, 2017 16:40 ET (20:40 GMT)