Microsoft today announced a deal to acquire Monteal-based Maluuba, a deep learning startup specializing in natural-language processing.

It's the latest of Microsoft's moves into AI, which is heating up as a competitive area among computing giants. IBM of course has Watson, and Google has its DeepMind project.

In August, Microsoft announced its deal to acquire Genee, a startup developing a smart chatbot. (Maluuba is working in that area as well.)

More significantly, Microsoft in September launched its Artificial Intelligence and Research Group, staffed by more than 5,000 computer scientists and engineers.

It's that group that is acquiring Maluuba, as Microsoft Executive Vice President Harry Shum explains in a blog posting today.

Shum's post doesn't mention the cloud, but it seems likely that Maluuba-powered services would do their processing and data-sifting there. For instance, Shum describes the potential for a digital assistant sifting through enterprise documents in a policy-compliant way.

Maluuba was founded by CTO Kaheer Suleman and CEO Sam Pasupalak, classmates at the University of Waterloo. (They're on the left and right, respectively, in the photo above.) Areas their team has been concentrating on include "dialogue understanding, and general (human) intelligence capabilities such as memory, common-sense reasoning, and information seeking behavior," according to the founders' own blog posting today.

Maluuba's engineering team is based in Waterloo, Ontario, and its research arm is in Montreal.