IBM to invest $1bn in new Watson supercomputer unit

IBM has announced the creation of a new $1 billion (£607 million) division for its gameshow-winning supercomputer Watson.

Named after former IBM president Thomas Watson, the supercomputer first came to public attention three years ago when it beat human contestants in the US television quiz Jeopardy.

The supercomputer's power lies in its ability to interpret natural language and answer questions drawing from vast amounts of data.

Such a skill will be put to use in a variety of fields, from healthcare to financial services, as demand for cognitive computing increases.

Michael Rhodin, the former senior vice president of IBM's software solutions group, will head the new unit.

"There's great potential in the Watson technology; it's a very advanced representation of the question-and-answer approach," said Gartner analyst Jamie Popkin.

"I think they've developed something that takes us to the next step where information management needs to go."

Last month it was announced that Watson would be used to power three new apps in 2014, including a "cognitive, expert personal shopper" called Fluid Retail.

"Fluid, which builds online shopping experiences for retail businesses to drive customer engagement and conversion, is developing the Fluid Expert Personal Shopper powered by IBM Watson," said Stephen Gold, vice president of IBM Watson Solutions.

It came as part of IBM's plans to use the supercomputer technology to provide a cloud-hosted marketplace through which developers could partner with the company to create Watson-powered apps.

"Together with IBM, these business partners share a vision for creating a new class of cognitive applications that transform how businesses and consumers make decisions," the firm said at the time.