Microsoft Acquires AI-Powered Content Moderator Two Hat

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Two Hat, a content moderation company that uses AI to classify and filter messages, usernames, images, and videos, has been acquired by Microsoft. The acquisition comes after the two companies have worked together, with Microsoft crediting Two Hat for helping "to make global communities in Xbox, Minecraft, and MSN safer for users."

Two Hat was founded by Chris Priebe in 2012 when the then-developer left his position as a senior application security specialist at Disney. Before founding the company, he developed safety and security elements for Club Penguin. The company's goal, simply put, is to ensure that players don't stop playing games due to negative social interactions.

"For any online community to thrive, content moderation is a critical investment to ensure positive user experiences and maintain engagement over time," said Xbox product services vice president Dave McCarthy in a post on Microsoft's site. "Microsoft and Two Hat share a vision for using advancements in moderation technology to nurture and protect diverse, global online communities."

Microsoft's purchase of Two Hat, which the company has not disclosed the cost of, comes following two failed attempts by the tech giant to buy some of the internet's largest community platforms. In August 2020, Microsoft attempted to purchase TikTok, although the acquisition fell through as the two companies couldn't come to an agreement. TikTok, which was then being fought over by Walmart and Oracle, was then blocked from being sold at all by the Biden administration.

Similarly, Microsoft attempted to purchase voice chat app Discord this past April for a sum of $10 to $12 billion. The purchase, like TikTok's, fell through, although only because Discord instead sought to continue as an independent company.