News Microsoft Says It Will Build a Quantum Supercomputer Within Ten Years

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How did they make this prediction of 10 yrs ? Based on which theory ? They have not given much details about the tech work though

Bases on the phase and stages of development of a QC, including NISQ and the last "scaling" phase.
 
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There are many applications. Medical science, space engineering, AI and ML, cyber security, drugs discovery, weather forecast and even more
Yes, except not really AI, as far as I've heard. The problem AI has way too many parameters for a quantum computer to optimize. You'd need multiple millions of qubits for some of the smaller models in use today - although perhaps not perfect entanglement.