Here's why Twitter just spent a reported 150 million on an AI start-up

On Monday, Twitter (TWTR) announced it was acquiring Magic Pony, a U.K.-based startup featuring 11 PhDs, for an undisclosed sum. The move should help improve the social networks's video content, but it's unclear whether it can really move the needle in terms of its larger challenges of attracting and retaining users. Magic Pony was working on artificial intelligence (AI)/machine learning technology that can automatically analyze and enhance photo and video content. Interestingly, its solution relies not only on analysis of content within an image itself, but also of similar images, in much the same way humans classify and group objects they have seen. Twitter, whose user Timelines tend to be chock-full of video content from its standard 30-second video upload service, its Vine 6-second video platform and increasingly, its Periscope livestreaming platform, said the purchase will expand "the machine learning capabilities in Twitter's video technology and [add] valuable talent" to its Cortex machine learning team.