Microsoft buys Nuance for $ 56 per share in an all-cash transaction worth $ 19.7 billion, including debt.
Nuance is a cloud and artificial intelligence software company, primarily active in the healthcare sector.
A move that reflects the company's continued investments in the artificial intelligence sector.
It is the second major acquisition after LinkedIn in 2016 for over $ 26 billion.
Nuance, headquartered in Burlington, near Boston, was founded in 1992 and has 7,100 employees.
It specializes in the field of so-called "conversational AI" for applications in healthcare, telecommunications, automotive, financial services and more.
The company reported revenue of $ 345.8 million in the quarter ended December 31.
Microsoft has partnered with Nuance in the past on healthcare related projects.
The company in turn has previously acquired Saykara, a Seattle-based healthcare solutions startup with a voice assistant for physicians in its portfolio.
Just a few days ago, rumors about a possible purchase by Microsoft of Discord, chat for video game enthusiasts, were spread.