UK-based artificial intelligence firm SwiftKey has been acquired by Microsoft, the company has confirmed.
The Financial Times reports the deal is worth $250m (£174m).
SwiftKey is known for its predictive keyboard, which can be found installed on millions of smartphone devices.
The company said it was a "milestone" in its history.
"Our mission is to enhance interaction between people and technology. We think these are a perfect match, and we believe joining Microsoft is the right next stage in our journey," said SwiftKey`s founders Jon Reynolds and Ben Medlock in a blog post.
The company, started by the Cambridge University graduates in 2008, is the latest UK artificial intelligence (AI) firm to be bought up by a US tech giant.
DeepMind - which began within the University of Oxford - was bought by Google in 2014, for £400m. Another firm, VocalIQ, was bought recently by Apple.
As well as the popular smartphone app, SwiftKey is known for being behind the computer software on Prof Stephen Hawking`s wheelchair.
The deal furthers Microsoft`s new mobile strategy, spearheaded by chief executive Satya Nadella.
Instead of focusing on hardware - where the company has a tiny share of the market with its Windows Phone range - the firm is now looking to build up a range of productivity software to be used on any kind of device.
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