A bold purchase that could possibly strengthen the growing influence of Microsoft in the healthcare industry is how the tech company has agreed to buy Nuance -the artificial intelligence developer- in a $16 million deal.
The leader of healthcare artificial intelligence is Nuance. If Nuance was to get joined with the Microsoft Cloud for Healthcare, which began in 2020, it could push Microsoft into the software business of healthcare.
The second-largest acquisition to get done by Microsoft is this deal, after LinkedIn. In 2016, LinkedIn got purchased for $26 billion by Microsoft.
Satya Nadella, the CEO of Microsoft, in a statement, said:
“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 the growth of Microsoft Cloud in Healthcare and Nuance.”
The company said that the CEO of Nuance will still be Mark Benjamin.
Nuance’s AI appeal
Most of this deal probably got made by Microsoft over Nuance’s Dragon Ambient eXperience (DAX) technology.
DAX is the Al software package that assists the medical professionals with intaking, telehealth, and documenting the patient. These areas are growing, especially for hospitals, as the entrance of patients during the pandemic.
There has been a comprehensive adoption of AI technology in the medical industry. According to the technology analyst at Wedbush Securities DAX, itself has a worth of anywhere between $3 billion to $4 billion.
The deal with this technology is perfect for the goals of Microsoft, as the company has been trying to get in Al.
In September, it got the exclusive license for GPT-3, which is a language model that OpenAl created and created human-like text.
In 2015, OpenAL got co-founded by Elon Musk. However, he criticized Microsoft move and said:
“This does seem like the opposite of open. OpenAI has essentially gotten captured by Microsoft.”
Many investors are over the moon about this merger as the stocks of Microsoft were slightly down while the stock of Nuance stock rose by 16%.
“For Nadella & Co, this is the right acquisition at the right time with Microsoft doubling down on its healthcare initiatives over the coming years. The Nuance deal is a strategic no-brainer.”
Furthermore, in addition to healthcare, the leader of speech-to-text and communications software is Nuance, which can further help Microsoft in its already established corporate cloud business.
The founding partner and principal analyst of Futurum Research, Daniel Newman, said:
“I believe the company is acquiring a set of capabilities that will in time crossover into applications in a call center, retail, financial services, and more.”
Furthermore, Nuance technology is already getting used by Walgreens to help people make an appointment for their Covid-19 vaccine and the Bank of Korea is using it to create the first biometrics solution for video calls for the banking industry.