IBM takes another shot at Watson as A.I. boom picks up steam

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IBM CEO Arvind Krishna speaks at a panel session at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2023.
Stefan Wermuth | Bloomberg | Getty Images

It’s been a long time since IBM has actively touted Watson. Originally created to beat humans at the “Jeopardy!” game show, Watson marked IBM’s early splash in artificial intelligence, but it never amounted to a profitable offering.

About 15 months ago, IBM sold its Watson Health unit for an undisclosed amount to private equity firm Francisco Partners.

Now, Watson has given way to WatsonX, and IBM is trying to ride the latest boom in AI. IBM is billing it as a development studio for companies to “train, tune and deploy” machine-learning models. The platform includes a feature for AI-generated code, an AI governance toolkit, and a library of thousands of large-scale AI models, trained on language, geospatial data, IT events and code, according to a release.

The new offering is part of a larger strategy shift, as IBM seeks to take the lead on user-friendly platforms for companies looking to introduce AI into their business models, in part because there’s a massive shortage of human talent in the AI market.

IBM is partnering with HuggingFace, the buzzy AI startup and open source platform that reached a $2 billion valuation last year. 

In a question-and-answer session with reporters on Monday, IBM CEO Arvind Krishna said companies can come in with a model they want to build and then let WatsonX get to work.

“We allow an enterprise to use their own code to adapt the model to how they want to run their playbooks and their code,” Krishna said. “Then they can deploy it for themselves without any danger of their code leaking.”

Clients and collaborators so far include SAP, NASA, Wix and PyTorch, and the platform will be available in the third quarter, IBM told CNBC. The company declined to share how costly it was to build WatsonX or how much time it took. Last month, IBM’s quarterly earnings surpassed analyst expectations, though revenue fell short of estimates. 

Krishna said he expects these new AI tools to be integrated most easily into areas like customer care, procurement, cybersecurity, and elements of supply chain and IT operations. In particular, they will replace “more repetitive, back-office processes,” he said.

“We see this easily taking anywhere from 30 to 50% of that volume of tasks and being able to do them with really as much or better proficiency than even people can do,” Krishna said. “That lot, we see getting embraced right away starting this year, and getting to full fruition over the next three to five years.” 

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