Microsoft Corp on Monday said it is buying speech technology company Nuance Communications Inc. in an all-cash deal valued at $19.7 billion, making a massive bet on health care artificial intelligence.
Microsoft is offering to purchase Nuance at $56 a share, a 23% premium to Friday’s close, according to a statement on Monday.
“Nuance provides the AI layer at the healthcare point of delivery,” Microsoft CEO Satya Nadella said in a statement, adding “AI is technology’s most important priority, and healthcare is its most urgent application.”
Microsoft’s acquisition of Nuance comes after the firms formed a partnership in 2019. The transaction is expected to close this year.
Mark Benjamin will remain the chief executive officer of Nuance and will report to Scott Guthrie, executive vice president of Cloud & AI at Microsoft, the company said.
The deal follows Microsoft’s recent acquisition of gaming company ZeniMax Media, and reports of buyout interests in messaging platform Discord, which also allows live audio events.
A deal for Nuance would be Microsoft’s second-biggest, after its $26.2 billion acquisition of LinkedIn in 2016.
Microsoft is tapping the Burlington, Massachusetts-based company tied to the Siri voice technology that makes software for sectors ranging from healthcare to the automotive industries.
Microsoft has been working with Nuance for two years on AI software that helps clinicians capture patient discussions and integrate them into electronic health records, and combining the speech technology company’s products into its Teams chat app for telehealth appointments.