Nuance, the company that makes the speech recognition software that powers Apple’s Siri voice assistant and the Dragon line of text-to-speech tools, is about to become a Microsoft subsidiary.

Microsoft has agreed to pay $19.7 billion to acquire Nuance in a deal expected to be finalized later in 2021. Does this mean Microsoft is investing to shore up its Cortana voice assistant software? Probably not.

While Cortana remains baked into Windows 10, Microsoft has killed off its Cortana apps for Android and iOS and ended support for the only smart speaker ever to work with the platform. Cortana isn’t exactly dead, but it also doesn’t seem to be all that important to Microsoft moving forward.

That said, AI and speech recognition continue to be a growth area and Nuance is a big player in those areas not just in the consumer space, but also in enterprise and healthcare markets – Microsoft especially emphasizes the healthcare field in its announcement.

Microsoft says it’ll use Nuance technologies to “augment” its existing Microsoft Cloud for Healthcare to expand the services the company can offer to healthcare customers and expand its market share in that space.

But Microsoft ownership of Nuance also gives the company a leg up in some of the other areas where Nuance plays including virtual assistances, interactive voice response, and biometric security.

Meanwhile, Nuance CEO Mark Benjamin notes that the two companies have been working closely together for the past 18 months and working together to expand into financial services, telecommunications, travel, retail, and government industries. The implication is that by joining Microsoft, both companies will be able to accelerate growth in those markets.

The only time Microsoft has spent more money than this on an acquisition is when the company bought LinkedIn for $26 billion in 2016.

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3 replies on “Microsoft is spending $19.7 billion to acquire Nuance, an AI & speech recognition company”

  1. Is this about patents? Nuance probably has some good engineers, a good code base and existing sales, but $20 billion seems like a lot for that. I guess Microsoft believes the it stock will not get diluted with the additional debt from the deal. Too big to fail I guess.

    1. $20bil seems like a lot based on the current facts, but maybe it is a steal based on the projections Microsoft is making for the demand of that tech in the coming years?

      Apple and Google also have a tendency to buy up tech partners, even when they’re being licensed to their competitors. Maybe MS just wants to beat everyone to this acquisition.

      Voice recognition is going to become more valuable in coming years, so I can see this being worth more than it appears currently.

      1. I was going to say something similar, but more bitter and resentful.
        Because this is software that totally could run locally, without some computer on the other side of the world even knowing about it, but we can’t have that.
        And I’m really sick of Microsoft and the rest of them taking over things that you can’t avoid and not lose social connections due to network effects.

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