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Microsoft buys AI speech tech company Nuance for $19.7 billion

Microsoft is , bolstering the Redmond, Washington-based tech large’s prowess in voice recognition and giving it additional leverage within the well being care market, the place Nuance sells many merchandise. Microsoft pays $56 per share for Nuance, a 23 p.c premium over the company’s closing worth final Friday. The deal contains Nuance’s internet debt.

Nuance is finest identified for its Dragon software program, which makes use of deep studying to transcribe speech and improves its accuracy over time by adapting to a person’s voice. Nuance has licensed this tech for many companies and purposes, together with, most famously, Apple’s digital assistant Siri. (Although to what diploma Siri at the moment depends on Dragon to reply customers’ queries is unclear.) Dragon is an trade chief by way of transcription accuracy.

The $19.7 billion acquisition of Nuance is Microsoft’s second-largest behind its buy of LinkedIn in 2016 for $26 billion. It comes at a time when speech tech is enhancing quickly, due to the deep studying increase in AI, and there are concurrently extra alternatives for its use.

Digital transcription has develop into extra dependable in a spread of settings, from medical consultations to board conferences and college lectures. The uptick in distant work has additionally created new alternatives. With so many conferences going down by way of video, it’s simpler to supply clients transcriptions by way of software program built-in straight into these calls. Zoom, for instance, presents by way of integration with third-party companies like Otter.

For Microsoft, which makes roughly two-thirds of its income from enterprise software program gross sales and cloud computing, enhancing its transcription companies for situations like these makes full sense. The company may combine Nuance’s expertise into its current software program, like Groups, or supply it independently as a part of its Azure cloud enterprise.

The speedy focus, although, can be on well being care, the place the 2 corporations have already labored collectively. , they introduced a “strategic partnership” to make use of Nuance’s software program to digitize well being information for Microsoft’s purchasers. Nuance’s well being tech, together with its Dragon Medical One platform, which is tuned to establish medical terminology, is reportedly utilized by greater than half 1,000,000 physicians worldwide and in 77 p.c of US hospitals.

“By augmenting the Microsoft Cloud for Healthcare with Nuance’s options, in addition to the good thing about Nuance’s experience and relationships with EHR methods suppliers, Microsoft can be higher capable of empower healthcare suppliers by way of the facility of ambient medical intelligence and different Microsoft cloud companies,” stated Microsoft in a weblog put up.

“Nuance supplies the AI layer on the healthcare level of supply and is a pioneer within the real-world utility of enterprise AI,” stated Microsoft CEO Satya Nadella in a . “AI is expertise’s most essential precedence, and healthcare is its most pressing utility. Collectively, with our associate ecosystem, we’ll put superior AI options into the fingers of pros all over the place to drive higher decision-making and create extra significant connections, as we speed up development of Microsoft Cloud in Healthcare and Nuance.”

Information of the Nuance acquisition was first reported over the weekend by Bloomberg, and it’s the most recent instance of Microsoft’s buying spree. Final month, the company accomplished its ZeniMax. Final yr, it was of social video app TikTok, and the company can also be reportedly in “” to buy communications app Discord.

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