Microsoft’s $20 billion AI deal will shake up how we work

Imagine the workplace of the future, where computers powered by artificial intelligence take care of the most tedious administrative tasks, making employees happier and more productive. Microsoft Corp. wants to be at the forefront of that future — and its deal for voice-recognition and AI specialist Nuance Communications Inc. shows it’s willing to spend a lot of money to do it.

Microsoft said on Monday that had agreed to buy Nuance Communications Inc. for about $56 a share, or almost $20 billion including debt. At first glance, it may seem like a strange candidate for what would become Microsoft’s second-largest acquisition after its $26 billion deal for LinkedIn Corp. For much of the last decade, Nuance’s sales have stagnated as the early pioneer of speech-recognition products wasn’t able to innovate fast enough. But that has changed. Given the impressive technology and potential inside its latest AI solution for health care, a purchase of Nuance makes sense.

The game-changing product is the Nuance Dragon Ambient eXperience, or DAX, which was released in February 2020. While prior offerings forced doctors to use devices to transcribe notes and then spend hours at the end of the day to file paperwork, DAX takes the administrative burden off their plate.