IBM Buys Denver Startup Wants to Make Its Supercomputer Even Smarter

IBM has acquired AlchemyAPI, a Denver startup that boasts it makes sense of the world's unstructured data. The company, a pioneer in artificial intelligence-based (AI) text analysis, offers a cloud platform that helps companies analyze text, images and video.

IBM said the buy will give its Watson Group access to machine learning technology. It will also give IBM access to a much bigger, ready-made user base — some 40,000 developers who are already using the AlchemyAPI platform.

Terms of the deal were not disclosed. But the purchase is in line with IBM's objective to make its Watson technology more profitable. Watson, a supercomputer, can sift huge amounts of data, learn from the results and respond to spoken questions. 

AlchemyAPI will be used to build cognitive apps, which learn as they interact with people and enhance IBM's objective of creating more human-like computing services.

Beefing Up Watson

IBM plans to absorb AlchemyAPI’s’s technology into the core Watson platform and use it to understand relationships between large data sets. It will also help Watson’s ability to ingest, train and analyze data in targeted industries as well as across general business, the company stated.

AlchemyAPI will expand the number and types of scalable cognitive computing APIs available to IBM clients, developers, partners and other members of the Watson ecosystem.

This includes language analysis APIs that will help users address text and visual recognition as well as detect label and extract details from images.

Watson made headlines in 2011 when it beat two previous champions on the U.S. quiz show Jeopardy. After that Big Blue set up an entire unit dedicated to Watson technology. But with no real direction, it appeared to stagnate.

Last June, IBM created the IBM Watson Group, a new business unit focused on the development and commercialization of cloud-delivered cognitive innovations.

It signified a strategic shift by IBM to accelerate development of "a new class of software, services and apps that think, improve by learning, and discover answers and insights to complex questions from massive amounts of Big Data."

In December, IBM announced a new use for Watson: a freemium analytics service that's available to all business users. It provides business professionals a unified experience and natural language dialogue so they can make better use data to achieve business goals, IBM claims.

Moving Ahead

The AlchemyAPI developer community is a big draw for IBM. AlchemyAPI has developers working on apps for health care, retail and other industries.

Gartner put AlchemyAPI in its "Cool Vendors in Smart Machines” last year. It even noted it was a competitor for Watson.

Gartner also noted the wide range of scalable AI services provided by AlchemyAPI. They are designed to help enterprises and independent software vendors build unstructured data applications.

When IBM created the Watson unit, it made a $1 billion investment in the business in development, research and marketing of cloud-delivered cognitive applications and services. 

It also included $100 million for venture investments that support IBM’s ecosystem of start-ups and cognitive apps.

Acquisitions like the AlchemyAPI buy "remain central to our strategy of bringing Watson to new markets, industries and regions,” said Mike Rhodin, senior vice president, IBM Watson.

IBM noted that thousands of developers, entrepreneurs, data hobbyists, students and others have already built more than 7,000 apps powered by Watson.