Microsoft Says It Will Acquire Nuance Communications

Cortana walked so Nuance could run.

Today, Microsoft announced that it will acquire Nuance Communications for roughly $19.7 billion, which represents a 23% premium over the company’s Friday closing price.

Meet Nuance: The Burlington, MA, company specializes in speech recognition. Xerox spin-off ScanSoft acquired Nuance in 2005. After merging, the entities agreed to use the Nuance name. We agree with that call.

• Also notable: Nuance holds a number of conversational AI-related patents, which it has gone to court to protect.

Microsoft is reportedly also pursuing a $10+ billion acquisition of Discord and recently completed a $7.5 billion takeover of gaming studio Zenimax Media.

The Nuance deal, Microsoft’s second-largest acquisition ever, doesn’t necessarily mean the company is plotting a return to the voice assistant market. Microsoft instead seems intent on bringing more conversational AI functionality to its enterprise and healthcare offerings.

• In a statement confirming the acquisition, Satya Nadella said: “AI is technology’s most important priority, and healthcare is its most urgent application.” —RD