Microsoft has announced that it is buying Nuance, an AI speech tech firm that specializes in speech recognition. The deal is reportedly worth $19.7 billion, a move that is expected to solidify Microsoft’s push towards full dominance in speech recognition.
The deal will also give the tech giant significant leverage in the healthcare industry, where Nuance has sold a lot of products in the past. The proposed takeover will see Microsoft pay $56 per share for Nuance, a figure that is 23% higher than the last reported Nuance stock price.
Although Nuance has developed an array of products, it is popularly known for its Dragon software. Dragon is an AI-powered speech recognition software that uses deep machine learning to transcribe speech and continues to improve on its accuracy by learning the user’s voice.
Dragon software has been licensed in many industries over the years, including for Apple’s popular voice assistant Siri. As far as transcription accuracy goes, there is no arguing that Dragon has so far remained an industry leader.
It’s no wonder Microsoft has spent huge bucks to make this happen. In fact, the $19.7 billion price tag is only second to LinkedIn, which the tech giant acquired for $26 billion. The move also comes during a time where speech recognition technology is improving massively, partly because of the increased application of AI and deep learning into the process.
The rise in remote work, occasioned by the global pandemic, has also made the demand for accurate speech software high. Microsoft will likely integrate Nuance and its Dragon software into various applications within its portfolio.
But more so, the technology could find excellent uses in remote collaboration software like Teams, where the need for speech transcription is very high. But despite this, many experts believe that the immediate focus for Microsoft will be the health care sector.
Microsoft and Nuance have already partnered together in this industry before. In 2019, for example, they announced a joint partnership to use the software provided by nuance to digitize health records for Microsoft clients. Besides, Nuance already has a very huge market reach in the industry.
Its software, Dragon Medical One, a speech recognition platform that can identify medical terms, is already being used by half a million physicians around the world. The platform has also been deployed in nearly 77% of hospitals in the United States.
By combining this software capability with Microsoft's Cloud services for the healthcare industry, both companies could potentially create products that will dominate the healthcare industry for a very long time to come.
The deal to acquire Nuance is also the latest in what is shaping up to be an unprecedented shopping spree by the tech giant. Just last month, Microsoft announced a deal to acquire games company ZeniMax for $7.5 billion. Additionally, Microsoft was also on the front line to acquire the US operations of social media app TikTok but the deal did not materialize.