IBM Looks To Sell Watson Health Division, Signaling Challenges For AI In Healthcare

Multinational technology stalwart IBM is exploring a potential sale of its faltering Watson Health division, in part to re-concentrate its efforts in the competitive and rapidly growing cloud computing market. Although it is a promising technology in healthcare, artificial intelligence has proven more difficult for IBM to implement in the real world. With all the potential AI-supercomputer Watson holds for the future, the reality seems to suggest it can’t quite outthink doctors and researchers.

Massive data sets and their analysis may work well in administrative functions, but complex medical decisions might yet be out of reach. IBM’s struggles with Watson Health are not new; a previous collaboration with the University of Texas MD Anderson Cancer Center failed to meet its goals after spending in excess of $60 million on the project. As IBM dials-back its ambitious AI healthcare project, it can focus on improving its hybrid-cloud operations while finding a suitor for Watson Health.

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IBM’s challenges with Watson are by no means an indictment on the use of AI in healthcare, but rather a reflection of the company’s over-ambition. AI can help health systems to improve workflows and manage electronic health records, but the technology is still incapable of providing reliable treatment recommendations. Broad data collections leave information gaps where complex medical conditions are concerned, and there are any number of intangibles and variables that are better handled by trained medical professionals. Another complication is the difficulty in collecting enough data from points across all aspects of healthcare. Patient information isn’t often freely shared, and there are few if any global standards in data collection quality. IBM, a company that is not quickly associated with the medical world, might be outmatched by the density and complexity of Americans’ health data.

IBM spent billions acquiring health-related companies as it tried to grow the Watson Health business: Truven Health Analytics, Merge Healthcare, and Phytel, to name a few. After investing at least $4 billion, IBM is ready to explore new options for the division that has, thus far, not turned a profit. While a sale to a private equity firm or industry rival could be in the cards, there is a possibility IBM could spin off Watson Health with the help of a special purpose acquisition company (SPAC)—but all scenarios require a buyer.