Microsoft acquires Nuance Communications, Inc., a leading provider of conversational artificial intelligence and cloud-based ambient clinical intelligence. Microsoft would pay $56 per share for Nuance in an all-cash deal worth $19.7 billion, including Nuance’s net debt. The transaction is scheduled to be completed later this year. The partnership began in 2019 with the aim of automating clinical administrative tasks such as documentation. It demonstrates Microsoft’s desire to broaden its leadership in an industry where digital transformation has accelerated as a result of the pandemic. Healthcare organizations have increased their technology investments in order to maximize sustainability and digital health services.

Mark Benjamin will continue to lead Nuance as CEO, reporting to Scott Guthrie, Microsoft’s executive vice president of cloud and AI after Microsoft acquires Nuance. Nuance, best known for pioneering speech technology and assisting in the introduction of Apple Inc’s (AAPL.O) virtual assistant, Siri, has undergone strategic evaluations led by CEO Mark Benjamin. Since splitting off and selling a range of less profitable business divisions, the company now focuses on healthcare and enterprise AI after providing voice recognition technology across industries. According to the company, it provides intelligent solutions such as clinical speech recognition, medical transcription, and medical imaging to 77 percent of U.S. hospitals.

Industries will benefit from Nuance’s business artificial intelligence and customer experience innovations, such as speech, virtual assistants, and biometric solutions. Microsoft claims that its innovations, when combined with Azure, Teams, and Dynamics 365, will help accelerate the development of next-generation tools for healthcare and other industries. This major purchase stems from a collaboration between Microsoft and Nuance, which was first revealed in October 2019 and based on ambient clinical knowledge to help streamline reporting activities and reduce clinician burnout. Microsoft’s gross addressable market (TAM) in the healthcare provider sector will be doubled as a result of the deal, taking the company’s TAM in healthcare to nearly $500 billion. Nuance and Microsoft will expand on their previous commitments to the expanded partner community, as well as the highest levels of data protection, security, and compliance.

“This acquisition brings our technology directly into the physician and patient loop, which is central to all healthcare delivery. The acquisition will also expand our leadership in cross-industry enterprise AI and biometric security,” Microsoft CEO Satya Nadella said on an investor call.