Microsoft has said that it would buy Nuance Communications, a provider of artificial intelligence and speech-recognition software, for about $16 billion, as it pushes to expand its use in the health care tech services.

The acquisition deal is said to be of $19.7 Billion including the debts

Nuance created the speech recognition software more than 20 years ago and has been building its domain across the sector of artificial intelligence.

Nuance, the owner of the transcription tool - Dragon, has an established set of customer care and text data related to health care. Microsoft has been working with the company since 2019.

The acquisition signals Microsoft corp has bigger aims in  Nauce's Technology and its data. Microsoft has said the acquisition will double the size of the health care market where it will compete to almost $500 billion.

“Nuance provides the AI layer at the health care point of delivery and is a pioneer in the real-world application of enterprise AI,” Satya Nadella, Microsoft’s chief executive, said in a statement.

The deal is Microsoft's biggest acquisition deal since acquiring Linked-In in 2015 for $26.2 Billion.

“Being able to solve that problem makes it that much easier to handle other industries’ terminology,” Nadella said.

“We saw the opportunity to super-scale how we change an industry,” Nuance’s chief executive Mark Benjamin said selling to a global powerhouse like Microsoft will let the company much more quickly sell internationally. 

Under the terms of the deal, Microsoft will pay $56 a share in cash, up 23% from Nuance’s closing price on Friday — a total of about $16 billion. Including assumed debt, the transaction values Nuance at about $19.7 billion.