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Microsoft to acquire AI firm Nuance for $19.7 bln

Microsoft will acquire artificial intelligence and cloud computing company Nuance for $19.7 billion, bolstering its healthcare offerings, the tech giant announced Monday.

Nuance’s technology is used extensively in medical records and is currently employed in more than three-quarters of US hospitals, Microsoft said in a news release. The transaction is all-cash and the sum includes Nuance’s net debt.

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The deal comes on the heels of Microsoft’s 2016 purchase of LinkedIn for $27 billion and represents “the latest step in Microsoft’s industry-specific cloud strategy,” Microsoft said.

Like other technology heavyweights, Microsoft has been a big beneficiary of the economic dislocations during COVID-19.

The company’s earnings jumped by 33 percent in the latest quarter to $15.5 billion and included a boost from cloud computing and personal computing, including its Xbox video games.

Nuance’s technology is currently used by more than 55 percent physicians and 75 percent of radiologists in the United States. Microsoft said the deal would double its potential healthcare market to nearly $500 billion.

“AI is technology’s most important priority, and healthcare is its most urgent application,” Microsoft Chief Executive Satya Nadella said.

“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.”

Shares of Nuance surged 19.2 percent to $54.32 in pre-market trading, while Microsoft edged up 0.2 percent to $256.24.

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