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Xiaomi Founder and CEO Lei Jun shows Microsoft CEO Satya Nadella around a Xiaomi retail store last year. (Xiaomi Photo)

Microsoft and Chinese electronics company Xiaomi agreed to a new strategic partnership focused on artificial and cloud technology, further cementing the relationship between the two tech giants.

Xiaomi says it will leverage Microsoft’s artificial intelligence and cloud prowess to improve its lineup of smart devices and fuel international expansion. Microsoft will bring its experience in marketing and product development to help Xiaomi get a global foothold for its laptop devices. The move will help Microsoft further crack the highly restrictive Chinese and give it even greater exposure globally as Xiaomi embarks on worldwide expansion.

“Xiaomi is one of the most innovative companies in China, and it is becoming increasingly popular in various markets around the world,” Harry Shum, executive vice president of Microsoft’s Artificial Intelligence and Research Group, said in a statement. “Microsoft’s unique strengths and experience in AI, as well as our products like Azure, will enable Xiaomi to develop more cutting-edge technology for everyone around the world.”

As part of the deal, the two companies will explore using Microsoft’s Azure cloud services for data storage, bandwidth, computing and other cloud services in international markets. In 2015, Xiaomi started using Microsoft Azure operated by 21Vianet in China to run its Mi Cloud service for smartphone users.

Microsoft’s digital assistant Cortana could soon show up in Xiaomi’s Mi smart speaker. The two companies are exploring an integration and other ways to take advantage of the growing market around the world for AI-powered speakers.

The AI component of the deal goes far beyond smart speakers. The two companies plan to work together to further Microsoft’s research on concepts like computer vision, speech recognition, natural language processing and conversational AI.

Microsoft and Xiaomi have been partners for years, signing a global-level partnership in 2016. As part of that deal, Xiaomi installed Microsoft Office and Skype apps on its Android smartphones and tablets.

Microsoft has invested heavily in artificial intelligence, with its AI and Research group formed by Microsoft CEO Satya Nadella in 2016 as a fourth engineering division at the company. In its first year, the group grew by 60 percent to more than 8,000 people.

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