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Microsoft Acquires AI Speech Tech Firm, Nuance, For $19.7 Billion

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Microsoft is acquiring AI speech tech firm, Nuance, for $19.7 billion. The deal will bolster the tech giant’s standing in voice recognition and give it further leverage in Nuance’s target market, health care.


Microsoft will pay $56 per share for Nuance, which is a 23 percent premium over the company’s market closing price last Friday. The deal also includes Nuance’s net debt.


Nuance at $19.7 billion acquisition is the second-largest acquisition Microsoft has made following LinkedIn in 2016 for $26 billion. The deal is timed at a time where innovation in speech tech is improving rapidly. This is due to a major deep learning boom in AI and allowing for increasing opportunities in the field.

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Nuance’s most popular software, Dragon, uses deep learning to transcribe speech. The software improves its accuracy over time by adapting to a user’s voice. The company has licensed this technology for many services and applications, and they include, Apple’s digital assistant Siri. Dragon is also an industry leader in terms of transcription accuracy.


The increasing reliance on remote work due to the COVID-19 pandemic has also created new opportunities for the technology. With many businesses relying on video meetings,  it is easier to offer customers transcriptions via software integrated directly into these calls. Zoom offers automatic transcription with its calls via third-party services and Microsoft will be looking to do similar with Teams.


This is a Microsoft type of move as it fits into the profile of the company that makes about two-thirds of its revenue from enterprise software sales and cloud computing.


“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI. 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 the growth of Microsoft Cloud in Healthcare and Nuance,” Microsoft CEO Satya Nadella said in a statement



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