China's national flag, left, and Baidu Inc.'s corporate flag fly outside Baidu's headquarters in Beijing, China, on Monday, Nov. 12, 2012. Baidu is the owner of China's most-used search-engine. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images

Chinese search giant Baidu buys Seattle startup Kitt.ai to connect natural language tech to developers

Kitt.ai, the Seattle artificial intelligence startup that’s developing a conversational language engine known as ChatFlow and a “hotword” detection platform known as Snowboy, has been acquired by Chinese search giant Baidu.

Multiple bidders approached Kitt.ai about an acquisition, but co-founder Xuchen Yao told GeekWire that Baidu made the most sense because his team of three gets to stay in Seattle and operate its products under the Kitt.ai brand.

Yao declined to disclose the purchase price, but did say that it was “an excellent outcome for a company of three.” Yao said it is not an “acquihire,” and noted that “we get to keep our products and continue to operate independently in Seattle.”

Yao confirmed the news in a blog post late last night, noting that Baidu will help the company reach more developers who are interested in building natural language processing technologies into their products.

“Today KITT.AI joins Baidu, a search, AI, and autonomous driving company, to continue a joint mission of making the complex world simpler with (natural language understanding) technologies,” Yao wrote in the post.

Kitt.ai did not have to sell.

As Yao notes in the blog post, the young upstart was profitable and growing, with customers across the globe using Kitt.ai’s natural language technologies in smartphone apps, speakers, appliances, automobiles, hospitals and homes.

“A good mouth of word has awarded us in return quite well: we have paying customers from 4 continents of the world and we are profitable,” he wrote. More than 12,000 developers use the company’s Snowboy platform, which the company describes as a “deep neural network” whose hotword detection service allows developers to easily make common — or uncommon — words knowable.

Originally incubated inside Paul Allen’s Allen Institute for Artificial Intelligence (AI2), Kitt.ai launched in 2015 last year landed funding from Founders’ Co-op and Amazon’s Alexa Fund. It also received investment from Madrona Venture Group.

In addition to Yao, a Johns Hopkins University PhD graduate who previously worked at  the AI2 incubator, the startup’s co-founders included Guoguo Chen, a deep learning and speech recognition expert who created the “OK Google” hotword detection prototype for Android; and Kenji Sagae former professor of Natural Language Processing at USC and an expert in natural language parsing and dialogue systems.

The acquisition also hints at the demand for technologies in the emerging artificial intelligence and machine learning arena, an industry segment that has seen strong venture capital investment in recent years.

In Seattle, machine learning startup Turi was sold to Apple for about $200 million last year.

Other big companies have entered the AI buying spree in recent years, including Google, Microsoft and Amazon. In fact, data from Pitchbook shows that AI-related acquisitions began to accelerate in 2014.

The deal was first announced Tuesday at Baidu’s developer event in Beijing.

Asked why Kitt.ai decided to sell now, Yao said that it typically takes companies seven years to complete an IPO.

“We are on our 3rd year now and I don’t quite see us going IPO in 4 years, so we are selling,” Yao told GeekWire.

Where does the name Kitt.ai come from? No, it’s not meant to be a reference to the Knight Rider car. Instead, Yao told us last year that the origins were in the concept of an “AI toolkit,” with an extra “t” thrown in.

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