Microsoft is acquiring conversational AI company Nuance, a company that offers speech recognition software that is used in 77% of U.S. hospitals, in a deal worth $19.7 billion.
According to Microsoft’s announcement, the company plans to integrate Nuance’s solutions with its Microsoft Cloud for Healthcare offering that was introduced last year.
Nuance provides conversational artificial intelligence and cloud-based ambient clinical intelligence for the healthcare industry, including products like Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting.
Microsoft describes those solutions as “leading clinical speech recognition” software-as-a-service offerings already built on Microsoft Azure.
“Nuance’s solutions work seamlessly with core healthcare systems, including longstanding relationships with Electronic Health Records (EHRs), to alleviate the burden of clinical documentation and empower providers to deliver better patient experiences,” Microsoft says in its press release.
In addition to being used in more than three quarters of all U.S. hospitals, Nuance’s software is used by more than 55% of physicians and 75% of radiologists in the country.
The two companies already operated a successful partnership since 2019 that was designed to accelerate the delivery of ambient clinical intelligence technologies to make clinical documentation easier.
“By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, as well as the benefit of Nuance’s expertise and relationships with EHR systems providers, Microsoft will be better able to empower healthcare providers through the power of ambient clinical intelligence and other Microsoft cloud services,” the company said.
The acquisition doubles Microsoft’s total addressable market in the healthcare provider space, bringing that figure to nearly $500 billion, the company said.
In a statement, Microsoft CEO Satya Nadella said healthcare will be the first priority of the partnership.
“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Satya Nadella, CEO, Microsoft. “AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”
However, Nuance also provides AI expertise in other areas, including customer engagement solutions, virtual assistants, and digital and biometric solutions. Those technologies could be useful across Microsoft’s other offerings, including Azure, Teams, and Dynamics 365, the company said.
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