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Microsoft Makes Big Bet on Healthcare AI With Nuance


The pandemic showcased healthcare’s potential as a growth area for tech companies – a sector that has been slower than its counterparts in adopting technology. Recently Microsoft is making a massive bet on healthcare AI as it snaps up Nuance in an all-cash deal valued at nearly $20 billion.acquisition of speech recognition firm Nuance for close to $20 billion in an all-cash transaction is another step in this direction.

For the tech major, this is its second-biggest acquisition after LinkedIn in 2016 for $26 billion. The move will help Microsoft gain a stronger foothold in the voice recognition segment and will give it a boost in the healthcare market, where Nuance has strong presence too.

According to Microsoft, the effort is part of its industry-specific cloud strategy that includes Microsoft Cloud for Healthcare, introduced in 2020, which aims to address the comprehensive needs of the rapidly transforming and growing healthcare industry.

healthcareNuance is known for its Dragon software which helps to transcribe speech using deep learning. It is also believed to improve accuracy over time by adapting user’s voice. The company has licensed this technology for many services and applications, including Apple’s Siri. Microsoft can use Nuance’s technology with its existing software like Teams or even offer it independently as part of its Azure cloud business.

“By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, as well as the benefit of Nuance’s expertise and relationships with EHR systems providers, Microsoft will be better able to empower healthcare providers through the power of ambient clinical intelligence and other Microsoft cloud services,” said Microsoft in a blog post.

Both the companies have worked together on the past. In 2019, they announced a strategic partnership to use Nuance’s software to digitize health records for Microsoft’s clients.Microsoft said that Nuance solutions are currently used by more than 55% of physicians and 75% of radiologists in the US, and used in 77% of US hospitals.

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Microsoft CEO Satya Nadella in a statement. “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 growth of Microsoft Cloud in Healthcare and Nuance.”

Beyond healthcare, Nuance provides AI expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies around the world across all industries.

Gregory Moore, a corporate vice president of Microsoft’s health and life sciences business, will oversee the integration of Nuance into Microsoft, according to an internal Microsoft email. Before Microsoft, Moore led Google Cloud’s effort to get into the healthcare market.

Mark Benjamin, who will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft, said, “Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerated demand for advanced conversational AI and ambient solutions.”

“To seize this opportunity, we need the right platform to bring focus and global scale to our customers and partners to enable more personal, affordable and effective connections to people and care. The path forward is clearly with Microsoft —  who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference,” believes Benjamin.

This expertise will come together with the breadth and depth of Microsoft’s cloud, including Azure, Teams, and Dynamics 365, to deliver next-generation customer engagement and security solutions.

Commenting on the Microsoft-Nuance deal, Gregg Pessin, Gartner Sr. Research Director told CXOToday, “It is a new clinical foothold in the healthcare provider space for Microsoft as Nuance already provides digital medical transcription solutions for EHRs in use around the world. The real value in my opinion is the underlying AI that powers the NLP. Nuance has figured out how to teach their AI to understand complex medical terminology accurately and how they accomplished that has implications for many Microsoft products.”

He further said, “For healthcare, Nuance’s technology will get the intellectual and financial strength of Microsoft to push it forward.

The development comes at a time when speech technology is undergoing a significant shift because of AI and has greats potential in healthcare besides other industries. Microsoft, Amazon and Google are focused on selling their cloud-computing services—hosting data and providing online services remotely—to health systems. As Pessin said that he is already seeing accelerated improvement in patient care and engagement, IVR, applications for virtual care, ambient digital scribes, remote patient monitoring and some others. For other industries, the power of a voice interface to supporting systems should be significant.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at