Microsoft spun off Xiaoice but kept a stake in it

The design

In July 2020, Microsoft announced it would spin off its Xiaoice chatbot business into an independently operated company, according to contemporaneous reporting on the company's statement. The new entity took the Xiaoice brand in China and the related Rinna brand in Japan, with a geographic focus described as Greater China, Japan and Indonesia. Harry Shum, the former Microsoft AI and Research executive who had championed Xiaoice internally before leaving Microsoft earlier that year, became the new company's chairman; Li Di, previously Xiaoice's general manager inside Microsoft, became CEO. A second contemporaneous report describes Microsoft's stated rationale as wanting "to accelerate the pace of local innovation in Xiaoice product lines," and says the transition was expected to complete within months.

What the evidence says

Both accounts describe Microsoft's own framing, not an independently audited transaction record; no Xiaoice-published or Microsoft-published release covering the spinoff was located, since Xiaoice's site renders through client-side scripts this review's tools could not execute, and Microsoft's press archive carries no matching release. The two reports agree on the key structural point: Microsoft did not fully exit. TechCrunch states Microsoft "retained stakes in the new independent entity and licensed technologies to it," and the second report says Microsoft planned to "maintain investment interest in the new company." Neither states a valuation, investment amount, or ownership percentage, so those figures should be treated as unknown.

What it asks of people

For people already talking with Xiaoice on WeChat, Weibo and other Chinese platforms, the spinoff asked nothing directly: both reports describe continuity of product and brand, not a migration or new consent process. What changed sat one level up, in corporate structure, as control moved toward a smaller, newly independent company with separately defined obligations under Chinese data and AI regulation. Neither report examined here addresses whether that change affected how Xiaoice's chat data was subsequently handled.

Privacy and safeguards

Neither source discusses user data protections, retention, or transfer terms as part of the spinoff. That silence is notable given the reported scale: TechCrunch cites Xiaoice reaching roughly 660 million users and hundreds of millions of connected devices. A restructuring of that size, moving a consumer chatbot's operating entity outside a company with Microsoft's public compliance disclosures, is the kind of event a privacy-conscious reader would expect a company statement to address; none was found.

• Did user data move to the new corporate entity, and under whose privacy policy?
• What share of the new company did Microsoft actually retain, and does that stake carry oversight rights?
• Where can a reader find the new operating company's own account of this transition, rather than third-party reporting of it?

The clearest fact here is a change in corporate ownership structure that both companies' own public communications leave largely undocumented; what is known comes from reporters describing Microsoft's statement rather than from a statement either company has published in full. That gap is itself a data point about how little transparency accompanied one of the larger corporate restructurings in the companion-chatbot field.