Microsoft acquires Nuance to usher in ‘new era of outcomes-based AI’

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Microsoft has completed its acquisition of Siri backend creator Nuance in a bumper deal that it says will usher in a “new era of outcomes-based AI”.

“Completion of this significant and strategic acquisition brings together Nuance’s best-in-class conversational AI and ambient intelligence with Microsoft’s secure and trusted industry cloud offerings,” said Scott Guthrie, Executive Vice President of the Cloud + AI Group at Microsoft. 

“This powerful combination will help providers offer more affordable, effective, and accessible healthcare, and help organisations in every industry create more personalised and meaningful customer experiences. I couldn’t be more pleased to welcome the Nuance team to our Microsoft family.”

Nuance became a household name (in techie households, anyway) for creating the speech recognition engine that powers Apple’s smart assistant, Siri. However, Nuance has been in the speech recognition business since 2001 when it was known as ScanSoft.

While it may not have made many big headlines in recent years, Nuance has continued to make some impressive advancements—which caught the attention of Microsoft.

Microsoft announced its intention to acquire Nuance for $19.7 billion last year, in the company’s largest deal after its $26.2 billion acquisition of LinkedIn (both deals would be blown out the water by Microsoft’s proposed $70 billion purchase of Activision Blizzard).

The proposed acquisition of Nuance caught the attention of global regulators. It was cleared in the US relatively quickly, while the EU’s regulator got in the festive spirit and cleared the deal just prior to last Christmas. The UK’s Competition and Markets Authority finally gave it a thumbs-up last week.

Regulators examined whether there may be anti-competition concerns in some verticals where both companies are active, such as healthcare. However, after investigation, the regulators determined that competition shouldn’t be affected by the deal.

The EU, for example, determined that “competing transcription service providers in healthcare do not depend on Microsoft for cloud computing services” and that “transcription service providers in the healthcare sector are not particularly important users of cloud computing services”.

Furthermore, the EU’s regulator concluded:

  • Microsoft-Nuance will continue to face stiff competition from rivals in the future.
  • There’d be no ability/incentive to foreclose existing market solutions.
  • Nuance can only use the data it collects for its own services.
  • The data will not provide Microsoft with an advantage to shut out competing software providers.

The companies appear keen to ensure that people are aware the deal is about more than just healthcare.

“Combining the power of Nuance’s deep vertical expertise and proven business outcomes across healthcare, financial services, retail, telecommunications, and other industries with Microsoft’s global cloud ecosystems will enable us to accelerate our innovation and deploy our solutions more quickly, more seamlessly, and at greater scale to solve our customers’ most pressing challenges,” said Mark Benjamin, CEO of Nuance.

Benjamin will remain the CEO of Nuance and will report to Guthrie.

(Photo by Omid Armin on Unsplash)

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