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Microsoft Development and Management

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.

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.

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.

Digital transcription has become more reliable in a range of settings, from medical consultations to board meetings and university lectures. The uptick in remote work has also created new opportunities. With so many meetings taking place via video, it is easier to offer customers transcriptions via software integrated directly into these calls.

For Microsoft, which makes roughly two-thirds of its revenue from enterprise software sales and cloud computing, improving its transcription services for scenarios like these makes complete sense. The company could integrate Nuance’s technology into its existing software, like Teams, or offer it independently as part of its Azure cloud business.

The immediate focus, though, will be on health care, where the two companies have already worked together. In 2019, they announced a “strategic partnership” to use Nuance’s software to digitize health records for Microsoft’s clients. Nuance’s health tech, including its Dragon Medical One platform, which is tuned to identify medical terminology, is reportedly used by more than half a million physicians worldwide and in 77 percent of US hospitals.

News Source: The Verge