Microsoft reportedly in talks to purchase AI and speech technology firm Nuance Communications

• Bloomberg News reported that Microsoft is in advanced talks to acquire AI voice company Nuance Communications.
• The deal would reportedly value Nuance at $16 billion, a 23% premium to Friday's close.
• Nuance Communications voice-technology was the framework for Apple's Siri.

Microsoft is negotiating a deal to buy Nuance Communications, an artificial intelligence and speech technology company, according to a report from Bloomberg News.

Bloomberg's anonymous sources said that the deal could be announced this week, and would value Nuance at roughly $56 a share. This would value the company at $16 billion, a premium of 23% where the stock closed on Friday, $43.58.

Microsoft declined to comment to Bloomberg. Insider reached out to both firms for comment but they couldn't be reached before publication.

Massachusetts-based Nuance, with a market cap just shy of $13 billion, is the developer of the Dragon Naturally Speaking family of voice technology products. Its speech recognition engine is the basis for Apple's voice assistant Siri as well as dozens of other real world applications with enterprise clients.

The take-private deal would be Microsoft's second-largest purchase ever after the company acquired LinkedIn in 2016 for $24 billion. The company has also acquired companies like Skype and GitHub.

Microsoft appears to be in an acquisitive mood. The company has been reported to be in deal talks with online-chat company Discord for over $10 billion. It also purchased game studio ZeniMax Media, the company behind video-game classics "Fallout," "Doom," and "The Elder Scrolls" for $7.5 billion in a deal that closed this year.

Microsoft failed to win a bid to acquire TikTok last year.

Nuance and Microsoft began to collaborate in 2019 on medical applications such as automatic note-taking during doctors' visits.

According to analyst Dan Ives at Wedbush Securities, Microsoft and Nuance Communications are two of the top three tech buys heading into first-quarter earnings season. Ives highlighted Nuance's "hospital-wide deployments" of its technology, with has created a growing revenue stream. Wedbush set a $65 price target, above Microsoft's reported bid.

Microsoft stock is up 15.4% from the end of the year at end of closing Friday.