Microsoft is to buy the artificial intelligence and speech technology firm Nuance Communications for about $16bn (£12bn), as it builds up its cloud-computing operation for healthcare and business customers. Nuance, known for pioneering speech technology and helping to launch Apple's virtual assistant, Siri, operates in 28 countries and reported revenues of $1.5bn in its last full financial year. The Massachusetts-based company said it served 77% of US hospitals, providing services including clinical speech recognition, medical transcription and medical imaging. The deal comes after the companies went into partnership in 2019 to automate clinical administrative work such as documentation. Microsoft's offer of $56 a share represents a premium of 22.86% on Nuance's most recent closing price.

After all, what we're talking about here is becoming AI-capable. Notice that I don't say "AI-centric." While many executives might see the appeal in becoming more "AI-centric" in order to showcase the innovative nature of their brand, I'd encourage these individuals to take a step back to ensure their priorities are in order. Technology is not typically an end goal in itself. Given the scarcity of talent in the AI space, enterprises' competitive differentiators likely won't come from how big of a technology infrastructure they build, but rather how focused and aligned their efforts are in leveraging AI's capabilities toward business objectives and serving the customer.

At VentureBeat's recent VB Summit event, I headed a session on whether enterprises should build or buy AI. Between comments from the panelists and a group of about 20 business leaders, a good decision tree emerged for how to answer this question. Given how important the question is, I wanted to share that decision tree more widely. As you can see, at the top of the tree is the question "Do you even need AI?" I believe AI can positively impact any and all businesses, so the correct answer should always be yes. The next question to ask is if AI is in your company's DNA.

When evaluating how AI can help a business, execs should figure out when computers can beat humans, according to Charlie Cole, the chief digital officer at Tumi. "If you think about the nexus of how you can pragmatically use artificial intelligence in a practical way, you have to ask yourself the question: what can a computer compute way the hell faster than you can, at a one-to-one basis?" he said. In Tumi's case, AI allows it to personalize its experience for each customer. The company is working with AgilOne, a software provider that can predict when customers are most likely to buy a product on an individual basis. Using AgilOne's software, Tumi can predict when its customers are likely to buy its bags and luggage. "What artificial intelligence allowed us to do is create an individual algorithm to every single one of you," Cole said.