Microsoft Will Pay $19.7 Billion for Speech-Recognition Company Nuance

Todd Spangler
·2-min read

Microsoft said it clinched a deal to buy Nuance Communications, a pioneering voice-recognition tech company, in an all-cash transaction valued at $19.7 billion, inclusive of Nuance’s net debt.

It would be the second-biggest acquisition for Microsoft behind its $26 billion deal for LinkedIn in 2016. Microsoft expects the deal to close in calendar year 2021, subject to approval by Nuance’s shareholders, regulatory approvals and other closing conditions.

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Microsoft had created its own voice-based virtual assistant, Cortana. Two years ago, the tech giant announced would no longer try to compete with Amazon’s Alexa and Google Assistant in the consumer market, and instead shifted to integrate Cortana into its suite of productivity applications.

Once the Nuance deal closes, Microsoft said, Nuance CEO Mark Benjamin will remain head of the company, reporting to Scott Guthrie, Microsoft’s executive VP of cloud and AI.

In the last few years, Nuance has focused on the healthcare and enterprise AI segments. Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting — which are built on the Microsoft Azure cloud platform. According to the company, Nuance solutions are currently used by more than 55% of physicians and 75% of radiologists in the U.S., and used in 77% of U.S. hospitals.

In addition to its products and services for healthcare, Nuance sells products across interactive voice response (IVR), virtual assistants, and digital and biometric solutions.

Microsoft says the deal will accelerate its ability to provide cloud-based solutions specifically to the healthcare industry. “Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” Microsoft CEO Satya Nadella said in a statement. “AI is technology’s most important priority, and healthcare is its most urgent application.”

Nuance’s software formed the basis of Apple’s Siri voice assistant, which debuted in 2011, before Apple brought development of the technology in-house.

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