Microsoft is reportedly in “advanced talks” to purchase Nuance Communications, a giant in the world of AI and speech technology according to Reuters today.

Nuance have been at the forefront of speech recognition technology since they introduced the world to Dragon Naturally Speaking way back in 1997. Since then, they have improved out of sight as you would expect but their continued development to remain at the forefront of speech technology has seen them work with Apple to help develop Siri making them a valuable company.

Mircosoft are reportedly offering around the US$16 billion mark for Nuance Communications, or around US$56 a share, 23% over what it is valued at currently. The talks are apparently ongoing and not final just yet with one source stating that the deal “could still fall apart”.

Not only did Nuance work with Apple to create Siri but have also been included in the development of healthcare and automotive speech recognition software making its reach very diverse. It is unclear just what plans Microsoft have for Nuance but they did work together in 2019 to develop medical software to allow doctors to record conversations with patients and automatically relay that information into electronic medical records.

While it is likely that Microsoft will use Nuance to improve Cortana it would be folly to think that this is the only reason for the upcoming acquisition. With so many applications of speech recognition in the world today it is likely that Microsoft see this as a burgeoning technology and “as a key driver of future sales of cloud services”, especially in Telehealth as we have seen during COVID-19 times. This is one way they could accomplish just that.

Microsoft, with a market value of US$1.93 trillion could obviously easily afford Nuance Communications but it would make it the second largest acquisition by Microsoft after their US$24 billion acquisition of LinkedIn in 2016. Expect more news of this Nuance Communications acquisition in the coming weeks.