Microsoft announced this morning that it will pay $19.7 billion for Nuance Communications, a speech-to-text company. The obvious focus here appears to be on healthcare — Microsoft announced a Cloud for Healthcare last year, and Nuance's industrial products include Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One for radiology reporting.
Nuance was a pioneer in voice recognition and was once the backend for Siri. However, the competition was swift: after advances in deep learning (a subset of AI) in the 2010s, Big Tech companies developed their expertise, and Apple brought Siri software in-house. Since then, Nuance has refocused on specific markets, most notably healthcare, where its tools transcribe doctor-patient conversations and update medical records.
Microsoft already has many speech recognition and chatbot products, including desktop speech to text services in Windows and Azure, but it took a risk by acquiring a market leader and expanding its presence in the healthcare vertical.
Both company boards have approved the transaction, and Microsoft expects it to close by the end of the year.
This would be Microsoft's second-largest acquisition, surpassing only the $26.2 billion paid for LinkedIn in 2016.