The Microsoft campus in Redmond, Wash.(GeekWire Photo / Todd Bishop)

The news: Microsoft is in “advanced talks” to acquire Nuance Communications for $16 billion, according to a report from Bloomberg on Sunday.

Nuance background: The Boston-area publicly traded company specializes in “conversational AI” for applications in healthcare, telecommunications, automotive, financial services, and more. Nuance reported revenue of $345.8 million in the quarter ended Dec. 31, down 4%, and non-GAAP net income of $91.4 million, up slightly year-over-year. The company’s stock has nearly tripled since March 2020 and its market capitalization is $13 billion.

Previous connections: Microsoft has teamed up with Nuance in the past on healthcare-related deals. Nuance also has a large presence in the Seattle region near Microsoft’s HQ as a result of several acquisitions including VoiceBox, Swype, Tweedle, Varolii, and Jott. Nuance in February acquired Saykara, a Seattle health-tech startup that makes a voice assistant for clinicians.

A big deal: At its reported price, the acquisition would be Microsoft’s second-largest to date, behind its $26.2 billion purchase of LinkedIn. It reflects the company’s continued investment in artificial intelligence, speech technology, and healthcare. Microsoft is on the “M&A warpath over the next 12-to-18 months,” according to Dan Ives, an analyst with Wedbush, citing recent reports of Microsoft’s interest in buying Discord and its $7.5 billion acquisition of ZeniMax.

We’ve reached out to Microsoft for comment and will update if we hear back.