Microsoft to Buy AI & Speech Technology Company Nuance for $16 billion

Microsoft Corp. is in advanced talks to buy artificial intelligence and speech technology company Nuance Communications Inc., according to several sources.

Microsoft first approached Nuance in December and is reportedly willing to pay about $56 per share for Nuance.

Nuance derives revenue by selling tools for recognizing and transcribing speech in doctor’s visits, customer service calls, and voicemails. Nuance is also known for laying the groundwork for the technology powering Apple’s Siri voice software.

Microsoft and Nuance have collaborated to deliver technologies such as allowing doctors to capture voice conversations from patient visits and enter the data into electronic medical records.

“This can really help Microsoft accelerate the digitization of the healthcare industry, which has lagged other sectors such as retail and banking,” said Anurag Rana, a Bloomberg Intelligence senior analyst. “The biggest near-term benefit that I can see is in the area of telehealth, where Nuance transcription product is currently being used with Microsoft Teams.”

Nuance’s shares have climbed 3.4% this year, giving the company an almost $13 billion market value but still trailing the 9.9% jump in the S&P 500 Index. Whereas Microsoft has climbed to 15%. The deal with Nuance would be Microsoft’s second-biggest deal, after its $26.2 billion acquisition of LinkedIn in 2016.