IBM creates $1bn Watson business group

AI software has so-far made IBM $100m in revenue.

IBM CEO Virginia Rometty told executives in October 2013 that she hoped Watson would be able to generate $10 billion in revenue over the next decade.

This projection was made after the executive in charge of the Watson division said the technology would be able to generate $1 billion of revenue a year by 2018,  according to a conference call transcript seen by The Wall Street Journal.

IBM could find it difficult to achieve this target, with the firm having made just $100 million in revenue three years after commercialising the technology.

Watson differs from other AI as it is not only able to recall and apply facts to problems, but can also learn from its mistakes. This allows it to perform tasks such as recommending treatments for cancer patients.

However, despite the potential of Watson, tailoring it to fit varying commerical environments is not easy.

To-date there are only a handful of companies using Watson, including healthcare research company MD Buyline and health insurer Wellpoint.

WellPoint determines if treatments requested by a doctor meet company guidelines and a patient's insurance policy. Watson initially took too long to learn WellPoint's policies, according to Elizabeth Bigham, WellPoint vice president. IBM engineers had to rework Watson's training programme, and the company now uses the recommendations the technology provides on a daily basis.

Despite difficulties, IBM is confident that Watson will come good.

"IBM is making excellent progress with clients and with partners in advancing Watson, and we are excited about Watson's future as a cloud service and as technology that will change lives," the firm said in statement.

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