Microsoft buys Siri co-creator Nuance in $19.7 billion deal
Microsoft Corp has bought AI speech tech company Nuance in an impressive $19.7 billion acquisition deal. The firm famously helped Apple develop its Siri voice assistant with its pioneering work in the text-to-speech field since its founding in 1992. The deal will allow Microsoft to tap into the healthcare space, where Nuance has a stranglehold with its 80 percent market share in the US.
Microsoft's second largest acquisition won't be finalized until 2021-end
Microsoft paid $56 per share to acquire Nuance, which is a 23 percent premium over the then traded price of the stock value. The company's CEO Mark Benjamin will retain his role and report to Microsoft's Cloud and AI executive vice president Scott Guthrie. Notably, Microsoft's second largest acquisition won't close until the end of 2021 to account for regulatory protocols and shareholder approval.
Nuance has been in voice recognition business since the 1990s
Nuance has pioneered the field of digital voice synthesis with its highly successful Dragon Naturally Speaking text-to-speech software in the late '90s. In addition to co-developing Apple's Siri voice assistant, the seminal speech recognition expert has dominated the healthcare market with its voice-driven medical software. Nuance's medical software suite allows doctors to take voice notes and generate medical reports with ease.
Wedbush Securities analyst Dan Ives explains the logic behind acquisition
"The Nuance deal is a strategic no brainer in our opinion for MSFT and fits like a glove into its healthcare endeavors at a time in which hospitals and doctors are embracing next generation AI capabilities from thought leaders such as Nuance."
Nuance acquisition comes on the heels of Cortana failure
To note, Microsoft's AI assistant Cortana has been an unmitigated failure on mobile devices, with the company pulling the plug on the iOS and Android apps. Hence, if it can't build a good AI assistant, Microsoft has chosen to buy its way out. Although Nuance's acquisition is being analyzed as Microsoft's foray into medical tech, the company's role in developing Siri cannot be ignored.