Microsoft makes its second-largest acquisition with Nuance for $19.7 billion

Microsoft is buying Nuance Communications Inc., an AI company specializing in voice recognition and related software and services.

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Credit: Microsoft

Microsoft is buying Nuance Communications Inc. for $19.7 billion, officials announced on April 12. The move -- Microsoft's second-largest acquisition in corporate history after LinkedIn, which Microsoft bought in 2016 for $26.2 billion -- comes a day after a report claiming the two companies were in "advanced talks."

Microsoft said that Mark Benjamin will remain CEO of Nuance, reporting to Microsoft Executive Vice President of Cloud and AI Scott Guthrie. Microsoft officials said the transaction is intended to close this calendar year.

The synergies between the two companies are fairly clear. Nuance develops cloud and AI software and services, with a strong focus on healthcare and enterprise customers. Microsoft recently announced the Microsoft Cloud for Healthcare bundle and has invested heavily in the healthcare space over the past decade.

In 2019, Nuance and Microsoft announced a strategic partnership to deliver ambient clinical intelligence (ACI) technologies. The two said they'd work together on combining the Dragon Medical platform with Azure, Azure AI services, and ProjectEmpowerMD intelligent-scribe service, along with various other conversational AI technologies developed by the two companies.

Last fall, the two companies said Nuance's Dragon Ambient eXperience ACI solution had been integrated with Microsoft Teams.