Microsoft Buys Nuance for $19.7B

Microsoft has bought voice tech mainstay Nuance for about $19.7 billion. Nuance and Microsoft have been partnering on products relying on voice AI for a while, but the acquisition gives Microsoft access to Nuance’s extensive portfolio of tech to complement its drive for more of the enterprise AI market. An earlier report suggested the price was $16 billion, which may reflect the value after all debts are paid off.

Nuanced Dealings

Nuance’s roots in the voice tech industry go back nearly three decades. The tech that led to Siri was born at Nuance, and Dragon became the first well-known consumer voice-to-text tool well before the advent of voice assistants in smart speakers. After spinning off Cerence as the hub of automotive voice AI, healthcare has risen in prominence at Nuance and one that’s led to regular collaboration with Microsoft. Nuance’s Dragon Medical Virtual Assistant has run on the Azure cloud platform since 2019, transcribing conversations between doctors and patients and helping fill in electronic health records. Microsoft added virtual check-ups via Nuance to the Teams messaging platform last year as telemedicine exploded in popularity due to the COVID-19 pandemic.

The pandemic accelerated Nuance’s healthcare work over the last year as demand sped up the testing and adoption of technology in the industry. Health technology developer Cerner added the Dragon Medical Virtual Assistant to its platform last summer for instance, while the U.S. Department of Veterans Affairs (VA) started using Nuance’s Dragon Medical One platform in the fall.  The company launched a COVID-19 and vaccine assistant at the end of last year and recently created a voice assistant for Walgreens to help schedule vaccine appointments. Nuance launched late last year. One recent attraction for Microsoft might be Nuance’s own acquisition of medical voice tech startup Saykara in February.

“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. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”

Microsoft Wallet

Nuance is only the latest big-ticket company to draw Microsoft’s acquisitive eye, even if just speculatively. The company recently purchased ZeniMax Media, the parent company of BethesdaSoftworks, for $7.5 billion, and was supposedly in the running to buy the U.S. facet of TikTok at one point. And it’s been just a couple of weeks since rumors spread that Microsoft is interested in purchasing Discord for $10 billion as an entry to the recent social audio market explosion. Nuance is the second-most expensive acquisition by Microsoft, after spending $27 billion for LinkedIn in 2016. Details of what will happen to the more than 7,000 Nuance employees have not been revealed as of yet.

“Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerated demand for advanced conversational AI and ambient solutions,” Nuance CEO Mark Benjamin said. “To seize this opportunity, we need the right platform to bring focus and global scale to our customers and partners to enable more personal, affordable and effective connections to people and care. The path forward is clearly with Microsoft — who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference. At the same time, this combination offers a critical opportunity to deliver meaningful and certain value to our shareholders who have driven and supported us on this journey.”


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