Google buys API.ai, a startup with dev tools for speech recognition and a conversational assistant app with 20M+ users
Google today said that it's acquired API.ai, a startup with tools for speech recognition and natural language understanding. Terms of the deal weren't disclosed.
Context & Ripple Effects
API.ai lands at Google twelve days after the $625M Apigee deal, capping a year in which Google has been assembling an API-and-tools stack rather than buying end products. In March it had already opened its own speech recognition API directly against Nuance; API.ai adds the natural-language-understanding layer and a developer community on top of that plumbing.
The prize here is twofold: developer tooling that makes conversation interfaces easier to build, and a consumer assistant app with more than 20M users — both raw material for whatever assistant platform Google is building.
First-order effects
- Developers building bots and voice apps on API.ai now sit inside Google's ecosystem, and Nuance — which Google began competing with when it opened its speech API — gains a rival that owns both the recognition layer and the intent-parsing layer.
Second-order effects
- The acquisition gives Google's cloud speech business a natural-language front end, strengthening the API bundle it sells to developers against standalone tool vendors who must now compete with a free-at-the-margin hyperscaler.
Third-order effects
- Conversational-interface technology is consolidating into the big platforms' clouds — a pattern the corpus shows repeating on the rival side when Apple bought Voysis to shore up natural-language understanding for assistants — leaving independent NLU startups with a build-for-acquisition path or a fight against bundled pricing.
The trend: Voice and conversational AI are being absorbed into the major cloud platforms' developer stacks, with acquisitions of tooling startups doing the absorbing.