Microsoft has agreed to purchase speech recognition and artificial intelligence specialist Nuance in a bid to strengthen its cloud and AI-based healthcare business.
Microsoft said the all-cash deal is valued at $19.7 billion, or $56 per share – representing a 23 percent premium over Nuance’s most recent closing price. Once complete, it’ll be Microsoft’s second-largest acquisition ever, after the $26.2 billion it paid for LinkedIn in 2016.
Nuance has been a leader in the field of voice recognition for years, leading to widespread adoption in healthcare. According to Microsoft’s press release, Nuance products are used for clinical documentation by 55 percent of physicians and 75 of radiologists in the US.
The immediate focus, will be on health care, where the two companies have already worked together. In 2019, they announced a “strategic partnership” to use Nuance’s software to digitize health records for Microsoft’s clients. Nuance’s health tech, including its Dragon Medical One platform, which is tuned to identify medical terminology, is reportedly used by more than half a million physicians worldwide and in 77 percent of US hospitals.
“By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, as well as the benefit of Nuance’s expertise and relationships with EHR systems providers, Microsoft will be better able to empower healthcare providers through the power of ambient clinical intelligence and other Microsoft cloud services,” said Microsoft in a blog post.
“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Microsoft CEO Satya Nadella 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 in Healthcare and Nuance.”
News of the Nuance acquisition was first reported over the weekend by Bloomberg, and it’s the latest example of Microsoft’s purchasing spree. Last month, the company completed its $7.5 billion acquisition of games company ZeniMax.
