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Microsoft bought speech recognition company Nuance for $ 16B

Microsoft, in the face of accelerating growth, is making a $ 16 billion deal with word recognition company Nuance.

The acquisition will deepen Microsoft’s hospitals և healthcare industry through Nuance’s widely used medical dictation և transcription tools.

Microsoft pays $ 56 in cash per share. That’s 23% more than Nuance’s Friday closing price. The companies estimate the deal, including debt, at $ 19.7 billion.

Shares of Burlington, Massachusetts, rose about 16% on Monday.

Nuance pioneered voice-based artificial intelligence technology and played a key role in empowering Apple’s digital assistant, Siri. It has since shifted its focus to healthcare, including a product that listens to exam room conversations between doctors և patients և և automatically writes doctor recommendations, such as prescriptions or lab work.

“These clinical documents are essentially written on their own, giving doctors time to focus on patient care,” Microsoft CEO Satya Nadella said in a parliamentary call on the deal on Monday.

Microsoft և Nuance already had a business partnership in 2019. That relationship developed during the epidemic, allowing Nuance to bring its inpatient transcription services into telecommunications appointments through Microsoft’s Teams video conferencing program. Redmond, a Washington-based software giant, said this month’s deal would double its potential market share in the healthcare industry to nearly $ 500 billion.

“Turn on Microsoft և Nuance, it allows Microsoft to reverse the explosion of the healthcare market, which is now burning during modernization, embracing digital engagement and moving to the cloud,” said Kate Leggett, a Forrester analyst.

Nuance products include clinical speech recognition software offerings such as Dragon Ambient eXperience, Dragon Medical One և PowerScribe, all of which are now built on Microsoft’s Azure cloud platform. The companies state that Nuance products are used by more than 55% of physicians in the United States, 75% of radiologists, and 77% of US hospitals. Revenue from the cloud healthcare business grew by 37% year-on-year in fiscal year 2020.

“AI is the most important priority of technology, healthcare is the most urgent use of it,” said Nadella.

Microsoft also has its own digital voice assistant, Cortana, but its use is limited compared to similar consumer systems from Amazon, Google, and Apple. Nuance has sought to improve voice recognition technology beyond the consumer’s reach to better understand the intricacies of medical jargon.

In addition to healthcare, Nuance provides voice-related AI technology in other products, including security features that can recognize and identify individual voices so they can open an online account. Nuance also sells automated call center, customer service chatbot services to retailers, telecommunications companies and more.

Scott Guthrie, who heads Microsoft’s AI cloud, said Monday that Nuance’s medical industry expertise could eventually be extended to other uses, such as commenting on conversations between financial advisers and their clients.

The deal is Microsoft’s second-largest deal in 2016 with a $ 26 billion acquisition of LinkedIn. Last September, he bought video game maker ZeniMax for $ 7.5 billion.

Legette said the Nuance deal fits in with cloud computing providers such as Microsoft to provide “industry-specific AI” or technology tailored to the specific needs of other healthcare industries.

That allows Microsoft to gain access to a new range of customers, says Gartner analyst Greg Pesin.

“At the moment, the CIO is who they sell to, along with the Office’s Teams operating systems,” Pesin said. “This is another market where the main doctors and doctors are. “This opens a new chapter in Microsoft’s healthcare initiative.”

Mark Benjamin will continue as CEO of Nuance.

The deal is expected to close this year. It has yet to be approved by regulators և Nuance shareholders. As of September, Nuance had 7,100 employees, more than half of whom were outside the United States, including staff helping to transcribe and edit recorded speech that AI technology might not fully understand.

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