Microsoft is considering acquiring Siri creator Nuance for $16 billion in a deal that’s expected to be announced imminently.
Silicon Valley darling Nuance is one of the world’s most recognisable AI companies for the creation of Siri, the voice assistant that would later go on to become Apple’s first-party solution.
Nuance now focuses its efforts predominantly on enterprise communications, particularly in the healthcare space which has seen increased interest amid the COVID-19 pandemic. Using technology from Nuance, medical staff can reduce their reliance on pen-and-paper and free up more time for improving patient outcomes.
Bloomberg initially reported Microsoft’s interest in Nuance.
Anurag Rana, Senior Analyst at Bloomberg Intelligence, commented in the report: “This can really help Microsoft accelerate the digitisation of the healthcare industry, which has lagged other sectors such as retail and banking.
“The biggest near-term benefit that I can see is in the area of telehealth, where Nuance transcription product is currently being used with Microsoft Teams.”
Nuance’s shares [NUAN] closed yesterday at $45.58 but Microsoft is reportedly prepared to pay $56 per share – over 20 percent higher. Nuance’s shares have increased pre-market to $54.90 per share, seemingly boosted by the rumours.
Microsoft has all but killed off its Cortana voice assistant for consumer-facing purposes, removing it from the App Store and Play Store earlier this month. Redmond now appears to be pivoting its efforts towards developing AI solutions for specific enterprise areas.
In addition to Nuance’s AI expertise, Microsoft would also be gaining access to the company’s over 3,500 patents.
If the deal goes ahead, it would represent Microsoft’s largest acquisition after its $24 billion takeover of Linkedin. Microsoft is also reportedly in talks to acquire gaming communications platform Discord for over $10 billion. This could be a very big news month for Redmond.
Update: Well, we did say the deal was expected to be announced imminently. Mere hours after this article went live Microsoft confirmed its acquisition of Nuance in an all-cash transaction valued at $19.7 billion.
“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Satya Nadella, CEO, Microsoft. “AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”
“Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerated demand for advanced conversational AI and ambient solutions,” said Mark Benjamin, CEO, Nuance. “To seize this opportunity, we need the right platform to bring focus and global scale to our customers and partners to enable more personal, affordable and effective connections to people and care. The path forward is clearly with Microsoft — who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference. At the same time, this combination offers a critical opportunity to deliver meaningful and certain value to our shareholders who have driven and supported us on this journey.”
“Nuance not only brings an attractive set of healthcare customers in AI – a huge bid for Microsoft – but also deep domain expertise as well. This has been the missing ingredient for Microsoft until now,” comments Nicholas McQuire, Chief of Enterprise Research at CCS Insight.
“In the past, we have seen firms like IBM buy industry specialism in datasets but Nuance delivers Microsoft a more mature set of AI solutions in areas such as speech recognition, document processing, fraud detection, and image recognition. Ultimately these will prove key to differentiating Azure to healthcare customers against its largely horizontal competitors.”
(Image Credit: Apple)
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