Microsoft is buying AI speech tech firm Nuance for $19.7 billion, bolstering the Redmond, Washington-based tech giant’s prowess in voice recognition and giving it further leverage in the health care market, where Nuance sells many products.
Microsoft will pay $56 per share for Nuance, a 23 percent premium over the company’s closing price last Friday. The deal includes Nuance’s net debt.
Nuance is best known for its Dragon software, which uses deep learning to transcribe speech and improves its accuracy over time by adapting to a user’s voice. Nuance has licensed this tech for many services and applications, including, most famously, Apple’s digital assistant Siri. (Though to what degree Siri currently relies on Dragon to answer users’ queries is unclear.) Dragon is an industry leader in terms of transcription accuracy.
The $19.7 billion acquisition of Nuance is Microsoft’s second-largest behind its purchase of LinkedIn in 2016 for $26 billion. It comes at a time when speech tech is improving rapidly, thanks to the deep learning boom in AI, and there are simultaneously more opportunities for its use.
