GOOG Alphabet Inc

By Jack Nicas 

Google is pitching its artificial-intelligence software to commercial customers in a bid to catch rivals in the increasingly lucrative business of renting its computer servers to other companies.

The Alphabet Inc. unit has fallen behind competitors Amazon.com Inc. and Microsoft Corp. in so-called cloud computing, a rapidly growing business in which tech firms host other companies' digital businesses on their servers. Forrester Research estimates roughly $10.8 billion in cloud revenues for Amazon this year, $10.1 billion for Microsoft and $3.9 billion for Google.

Google is making a renewed push into the cloud business, where it spent much of its $10 billion in capital expenditures last year to build new data centers and tapped Diane Greene, a high-profile Silicon Valley executive, to run the business.

A core part of Google's cloud strategy is artificial intelligence. Wednesday, Google said it would start letting cloud customers tap into two software programs it has used internally to draw meaning from text and convert speech to text. The programs use so-called machine learning, a rapidly accelerating technology that enables computers to make inferences based on data they previously had analyzed.

Google said, for example, that clients could use the programs to analyze customer reviews or social-media posts and to automatically transcribe customer-service calls for large-scale analysis. Google also offers programs that translate text and understand images, including the ability to flag pornography and detect emotions from facial expressions.

Many tech executives and computer scientists expect artificial intelligence to help transform businesses over the next several years, unlocking new insights from the reams of data companies collect. Analysts expect artificial-intelligence programs to play a growing role in cloud offerings from Amazon, Microsoft, Google and others.

Google says its machine-learning programs that convert speech to text, translate it and interpret it have helped one large customer analyze more than two billion minutes of customer-service calls to understand when customers end calls satisfied and when they don't.

"That's been an intractable, unsolvable problem," said Rob Craft, a Google product manager for machine learning.

Analysts said Amazon, Microsoft and International Business Machines Corp. all offer machine-learning programs that are similar to Google's with their cloud services.

Google's machine-learning offering "is great stuff, and it's finally packaged in a way that developers really want," Forrester Research principal analyst John Rymer said. "But they're not alone....And (Amazon) and Microsoft are far ahead."

Microsoft has promoted machine-learning programs as a selling point of its cloud business since last year, including programs that recognize faces and make predictions, said Joseph Sirosh, vice president of Microsoft's data group. Mr. Sirosh said Microsoft helped the public-school system in Tacoma, Wash., use its data to predict student dropouts and helped Dartmouth -- Hitchcock Medical Center in Lebanon, N.H., predict illnesses for certain patients.

The tech companies make money from the services by charging a fraction of a cent for every request of the technology. For Google's image-recognition function released several months ago, "one or two customers using it trillions of times turns it into a lovely revenue stream," Mr. Craft said.

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

July 20, 2016 12:14 ET (16:14 GMT)

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