Microsoft Corp. makes a massive bet on healthcare artificial intelligence.
The software giant is about to buy Nuance Communications Inc., leveraging the company linked to Siri voice technology to review solutions that free doctors from note-taking and better predict a patient’s needs. According to people familiar with the matter, Microsoft may announce the deal as soon as Monday if the talks are successful.
The price under discussion could value Nuance at about $ 56 per share, a 23% premium until Friday’s close, said one person, who asked not to be identified because the information is private. It is set to be Microsoft’s largest acquisition since LinkedIn Corp., the purchase would give Nuance a net worth of about $ 16 billion, according to data compiled by Bloomberg.
Microsoft has been attempting forays into the healthcare industry, selling more cloud software to hospitals and doctors. He has been working with Nuance for two years on artificial intelligence software that helps physicians capture patient debates and integrate them into electronic health records and combine speech technology company products into their application. Chat Teams for Telecare Appointments
“The Nuance deal would be a trophy for Redmond,” said Wedbush analyst Dan Ives, referring to Microsoft, based in Redmond, Washington. “Nuance is in the midst of an unprecedented strategic shift in recent years under the leadership of CEO Mark Benjamin and we believe the company represents a unique healthcare asset for Microsoft.”
Under Benjamin, Nuance has narrowed its focus and separated peripheral companies, such as Cerence Inc., the artificial intelligence automobile unit that expanded two years ago. It also sold its imaging division to Kofax of Thoma Bravo for $ 400 million and, in turn, expanded collaborations with healthcare providers and leading electronic medical record companies.
A Microsoft representative declined to comment. A Nuance spokesman, based in Burlington, Massachusetts, did not immediately respond to a request for comment.
Digitization Health care
Matisos shares have risen 3.4% this year, giving the company, which laid the groundwork for the technology used in Apple Inc.’s Siri, a market value of nearly $ 13 billion. The gain still followed the 9.9% jump in the S&P 500 index, meanwhile Microsoft added 15%.
As artificial intelligence software improves in analyzing language and predicting medical needs, Nuance and Microsoft can develop technology that searches for certain words in health records to make better suggestions to physicians to care for patients.
“This can really help Microsoft accelerate the digitalization of the healthcare industry, which has lagged behind other sectors such as retail and banking,” said Anurag Rana, a senior analyst at Bloomberg Intelligence. “The biggest short-term benefit I can see is in the realm of telehealth, where the Nuance transcription product is currently being used with Microsoft Teams.”
It had Nuance, whose products include Dragon voice recognition software net income of $ 91 million for revenue of $ 1.488 billion for its fiscal year ended Sept. 30, after losing $ 217 million the previous year.
Microsoft has also increasingly focused on health care. In May, the software maker unveiled an industry-specific cloud software package and also hired executives with medical training and machine learning research and artificial intelligence tools for areas such as clinical trials.
Coincidentally, one of Microsoft’s offices in Boston is right next to Nuance’s headquarters.
Still active
With a market value of $ 1.93 trillion, the highest in the world after Apple, Microsoft remains active on the offering front.
Last month, Bloomberg News reported that the software giant was in talks to acquire it Discord Inc., a video game chat community, for more than $ 10 billion. too video game buyer Zenimax Media Inc. for $ 7.5 billion in cash in a deal that closed this year.
The purchase of Nuance would be ranked as Microsoft’s second-largest acquisition, behind LinkedIn’s 2016 purchase worth more than $ 26 billion in assets, according to data collected by Bloomberg.
Microsoft entered the artificial intelligence space decades ago with research projects and a first approach by co-founder Bill Gates to find ways to facilitate the conversation of computers with computers with plain English.
The purchase of Nuance will complement the efforts of recent years, where Microsoft has assigned thousands of employees to its AI work and launched tools that customers can use to create applications that understand and translate voice, recognize images, and detect anomalies. The company views AI as a key driver of future sales of cloud services.
The acquisition may also give a boost to Microsoft, as it faces fierce competition in the AI space with rivals like Google’s Alphabet Inc. and Amazon.com Inc., which also invest heavily in the field.