Napster Returns To Spotlight As New AI Company

Touchcast took an investment from Microsoft to build a Cognitive Content Delivery
Network (cCDN) in June 2024, and since then entered into an agreement to be acquired by Infinite Reality, an immersive technology company for $500 million, a combination of cash and stock.

It’s a little complicated, but stay with me. If you’ve been following distributed networks for years like I have, this generative artificial intelligence (GAI) story became really
interesting around March of this year, when Infinite Reality acquired Napster — the same trailblazer that launched as a peer-to-peer file-sharing music service in 1999.

Infinite Reality last week rebranded to Napster Corp. after acquiring the brand for $207 million earlier in the
year, and launched an AI division to reimagine digital experiences. But Touchcast is where all the AI technology comes in and creates a division the company now calls Napster AI.

The deal returned Napster to the tech spotlight as an artificial intelligence (AI) company.

The Napster music-sharing service still exists, but Infinite
Reality acquired the rights to use the iconic brand name. The cCDN that Infinite Reality and Microsoft are building out relies on generative artificial intelligence (GAI) to distribute web
content across multiple servers in various geographic locations.

As a side note, Microsoft recently announced the closure of its demand-side platform (DSP) Invest — formerly Xandr DSP — to
focus on a new era AI-powered advertising platform that makes personalized advertising simple. That is something to keep in mind as we learn more about how Microsoft will replace its
DSP with a chatbot-style ad-buying product powered by Copilot, Microsoft’s generative AI (GAI) platform. (More to come on this topic.)

Napster as Infinite Reality
also acquired agentic AI company Touchcast in April for $500 million in a combination of cash and stock in what is Infinite Reality’s largest acquisition. The transaction agreement values the
company at $15.5 billion.

Mentorverse — Touchcast’s technology, built on OpenAI and delivered on Microsoft Azure — generates an infinite number of AI mentors that engage in
face-to-face video conversations. Unlike traditional chatbots or static web experiences, they combine multimodal interactions, and can have an expertise in whatever topic is needed.

The AI
characters interact like humans — part of the 27 patents the company holds related to AI and interactive video technology, including systems for coordinated presentations, video conferencing
enhancements, and intelligent virtual assistant systems.

The movement toward AI has opened the door for all types of companies including Google and Microsoft. This week the two opened new
doors through a barrage of innovation related to generative artificial intelligence (GAI) that will continue to rock all corners of advertising.

Bombora Chief Executive Officer Mark Connon has
no doubt that AI and agentic technologies will continue to impact every aspect of digital advertising, including planning, creative, audience development, execution, and measurement.

“Microsoft’s decision to deprecate Xandr is likely driven by many things beyond their AI strategies, however, it implies the use of AI is somehow inconsistent with DSP business models
and how the open web is widely monetized today,” Connon said. “We do not believe that Microsoft’s decision should be read as an indictment on DSPs and other digital advertising
leaders.”

In fact, he said, it could transform into the opposite as AI fuels innovation and unlocks opportunities.

“From our seat, we imagine a world where AI makes it
easier and faster to transform custom proprietary data signals” to create custom “audience segments across the digital advertising space,” he said.