In another big move, Microsoft has purchased AI company Nuance Communications, the second biggest purchase the company has ever made after its acquisition of LinkenIn back in 2016. This deal cost the tech-giant $19.7 billion and comes on the heels of another big purchase, Microsoft's acquisition of ZeniMax Media.

Nuance Communications is a computer software technology corporation that provides speech recognition and artificial intelligence. Microsoft and Nuance have had a partnership since 2019 in which Microsoft Cloud for Healthcare was augmented with Nuance's technologies.

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This is set to be an all-cash deal ($56 per share or 23% higher than the previous closing price) and will likely close by the end of the year. Nuance Communications' product lineup includes PowerScribe One for radiology reporting as well as the Dragon Ambient eXperience which is a mobile app that provides recording capabilities for telehealth and primary care visits. Microsoft will likely keep Mark Benjamin as CEO of Nuance and may find a use for the company's other AI applications such as virtual assistants and interactive voice response technology. According to Microsoft, this purchase doubles its total addressable market in the healthcare provider space and brings that number up to nearly $500 billion.

Artificial Intelligence as a technology has matured over the past half-decade and Microsoft was likely looking to improve its standing in this field with this purchase. Though Microsoft invested nearly $20 billion in Nuance, it likely is betting that the return will be far greater based on the money within the healthcare industry as well as Nuance's widely-adopted technologies. Both Boards of Directors of the respective companies have unanimously approved the purchase and, though it has to approved by Nuance's shareholders, the deal is all but set in stone.

This purchase won't have the same impact on Microsoft's gaming side as the company's ZeniMax purchase that brought Bethesda under the Microsoft umbrella. No new gaming titles fall under Microsoft's domain with this purchase and it doesn't seem incredibly likely that the technologies Nuance offer will touch anything that players interact with. It's hard to say whether this is good, bad, or indifferent news as its impact on the gaming industry remains relatively unclear and most likely limited.

This deal seems to show that Microsoft is not done shopping for companies to expand their reach however and that drive to buy might mean more gaming-related purchases in the future like its purchase of ZeniMax in 2020. Ultimately though, all this specific deal does is widen Microsoft's reach in the medical industry.

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Source: Microsoft