Microsoft is understood to be acquiring London-based SwiftKey, the startup which employed artificial intelligence to create a ground-breaking predictive smartphone keyboard, according to sources. The Financial Times is reporting that the deal is “around $250m”. TechCrunch understands the figure is just under that amount. UPDATE: Investor sources say the deal, which is all-cash, is definitely going through and will be announced imminently.

UPDATE 2: It’s confirmed.

The companies are understood to have been in talks for a number of months. Staff were told earlier today about the deal. SwiftKey declined to comment.

SwiftKey raised a total of $21.59 million from Octopus Ventures and Index Ventures, while UK celebrity Stephen Fry was an early angel investor.

SwiftKey’s keyboard and SDK is now on more than 300 million Android and iOS smartphones. And while its technology is hugely time-saving for users, the AI-powered platform could have far more uses for Microsoft than just keyboards. The predictive engine behind that keyboard could be put to many more uses.

Furthermore, by acquiring SwiftKey’s staf, and founders Dr. Ben Medlock (CTO) and Jon Reynolds (CEO), they are getting a kick-ass team which is so at the forefront of AI that even Professor Stephen Hawking has praised their work after they worked on a project to enhance the communication system used by the world-renowned scientist.

Here’s how SwiftKey works: