IBM to invest $1 bn on Watson unit

IBM will invest over $1 billion to establish a new business unit for Watson, as it hoped to boost revenue from the supercomputer system that beat humans on the American television game show "Jeopardy".

According to the world's largest technology service provider, the IBM Watson Group would be headed by Michael Rhodin, who was earlier senior vice president of IBM's software solutions group.

According to the company, the Watson Group would help IBM reach a $20-billion revenue projection for its big data and analytics services by 2015.

The company said the investment included a $100-million equity fund to spur innovation at its Watson Developers Cloud, which it threw open to external application developers last year.

The unit, which would be based in New York City, would have around 2,000 employees.

Watson, which beat experienced "Jeopardy" quiz show contestants in 2011, is an artificial intelligence super computer system and takes its name from legendary International Business chairman and CEO, Thomas Watson.

IBM said it planned to spend over $1 billion on the new unit, which already included over 2,000 employees.

Using natural language capabilities and analytics, Watson processes information much in the same way as people do, which allows for  quick analysis and interpretation of large amounts of data by the machine.

According to IBM, it had scaled down Watson to the size of three stacked pizza boxes from its original size of a master bedroom.

Forbes quoted Stephen Gold, vice president of IBM Watson group as saying, this was one of the top innovations in IBM history. He added, Watson was agile, fast, and it was cloud. He added, those were not how the market perceived IBM.

IBM had struggled in recent years to reset the narrative on its momentum, as it had to cut or furlough hundreds of staff and struggle in recent earnings.

At the same time, though, Watson had grown to over 2,000 staffers and now it was an independent unit–like an incubated startup proving itself one by one with other units of the company, according to Gold. Meanwhile, Watson itself had improved to operate 24x faster while taking up 90 per cent less space.