Microsoft Announces Acquisition Of Nuance, Setting Its Sights On Healthcare

As it looks to further expand into the applications of AI in healthcare, Microsoft has announced that it is acquiring speech recognition company Nuance Communications. Based in Burlington, Massachusetts, Nuance is best known for its Dragon software. Its software uses deep learning to transcribe speech and improves its accuracy over time by adapting to a user’s voice. Nuance has licensed this technology for many services and applications, including Apple’s digital assistant Siri.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

Ultimately, the Nuance acquisition will make Microsoft more adaptive to serve its customers and more creative as it learns how to apply Nuance's technology to create new opportunities across its customer base and business. Some are pointing out that this is Microsoft’s latest strategy to leapfrog its competitors Google and Amazon, as these companies face record antitrust scrutiny.

Digital transcription has become more reliable in a range of settings, from medical consultations to board meetings and university lectures. Most of the focus in the announcement was on AI in healthcare, pointing to Nuance being a leading provider in AI services in the sector.

Other big tech companies such as Apple and Google already have healthcare initiatives that are much older than Microsoft’s, but Microsoft is especially well-positioned to take advantage of this new acquisition because of its business model.

Microsoft said the acquisition would double the size of the healthcare market where it competed, to almost $500 billion. Nuance’s tools have previously been used mostly in the United States, but an acquisition by a global company like Microsoft will enable the company to expand its reach around the world. “We saw the opportunity to superscale how we change an industry,” Mark Benjamin, Nuance’s Chief Executive Officer, said in an interview.

The deal is worth around $19 billion, including debt, making it Microsoft's second-largest acquisition, behind the $26.2 billion deal for LinkedIn in 2016.