• Microsoft’s Nuance acquisition shows that the company has the cash and the clout to close big deals.
  • Microsoft has so far avoided the kind of regulatory scrutiny that can slow down M&A.
  • It could take advantage of this dynamic to expand its consumer strategy, including with Discord.

This week, Microsoft committed to paying as much as $19.7 billion for Nuance Communications, a company that once upon a time provided voice-to-text software for Windows and has since pivoted into artificial intelligence-powered assistance for health practitioners.

The deal – Microsoft’s second-largest ever after LinkedIn – follows a big run of M&A at the tech titan. In 2020 alone, Microsoft purchased video game publisher Zenimax Media (the company behind the “Elder Scrolls,” “Fallout,” and “Doom” franchises, among many others) for $7.5 billion, 5G networking company Affirmed Networks for a reported $1.35 billion, cybersecurity firm CyberX for for $165 million, and a handful of other smaller acquisitions besides.

Meanwhile, Microsoft is still said to be in talks to acquire Discord, the ubiquitous chat app, for as much as $10 billion. Then there are the deals Microsoft didn’t do: The company lost out to Oracle on the controversial (and apparently futile) bid for viral video chat app TikTok’s American business, and is said to have walked away from a potential deal to acquire Pinterest, too.

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