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IBM’s Watson, for a billion: 'How am I about to start making tons of dough?'

IBM's Watson computing system at the IBM T.J. Watson Research Center in 2011 in Yorktown Heights, New York. Watson is now reported to be the size of "three stacked pizza boxes."

Three years ago, IBM’s Watson beat the top human competition on Jeopardy. Since then, the project has reportedly failed to make much money

This morning, the company announced plans to invest a billion dollars in Watson, starting with a hundred-million dollar venture-capital fund. If Watson hasn’t become a moneymaker yet, IBM seems to say, that’s because it’s just been warming up. Now, it’s ready to take on the world. 

“This is a new era,” said CEO Virginia Rometty at a press conference. “It’s an era of machine-human collaboration, and it is dawning now.”

In addition to winning game shows, IBM executives say Watson can interact with -- and learn from -- humans on something like our own terms. They call the new approach “cognitive computing,” and they’re dedicating a new headquarters in Manhattan -- and eventually 2,000 employees -- to a new Watson division. 

Vasant Dhar heads the information systems group at NYU’s Stern School of Business. And he’s a Watson fan.

But he thinks the company should adjust its thinking. “The strategy they’ve followed so far doesn’t seem to me to be the path to riches,” he says.

By design, IBM works strictly with business clients instead of offering services to consumers. In Watson’s case, Dhar says that could be a constraint.

With its investment in Watson, IBM seems to be saying it disagrees. 

About the author

Dan is a sustainability reporter for Marketplace.
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