How IBM is Distracting from the Watson Failure to Sell More AI

Executive Summary

  • IBM has become a significant provider of false information around AI.
  • Central to IBM’s AI sales strategy is to distract attention from its colossal Watson failure.

Video Introduction: How IBM is Distracting from the Watson Failure to Sell More AI

Text Introduction (Skip if You Watched the Video)

For over a decade, Watson was a major marketing tentpole for IBM. IBM has sold many AI projects after making enormous promises about Watson AI that never panned out. Watson AI is a major failure, and IBM has been repeatedly accused of overstating what Waston could do for health care. However, as time has passed, these promises on Watson have been largely forgotten. IBM is deemphasizing Watson and has moved on to aggressively marketing other AI consulting services that also do not have a working history. You will learn the real story of Watson and what this says about IBM’s ability to follow through on its AI promises.

This article was updated in February 2021.

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Watson’s Failure at M.D Andersen

“We often call out overly optimistic news coverage of drugs and devices. But information technology is another healthcare arena where uncritical media narratives can cause harm by raising false hopes and allowing costly and unproven investments to proceed without scrutiny.

A case in point is the recent collapse of M.D. Anderson Cancer Center’s ambitious venture to use IBM’s Watson cognitive computing system to expedite clinical decision-making around the globe and match patients to clinical trials.

Launched in 2013, the project initially received glowing mainstream media coverage that suggested Watson was already being deployed to revolutionize cancer care–or soon would be.

But that was premature. By all accounts, the electronic brain was never used to treat patients at M.D. Anderson. A University of Texas audit reported the product doesn’t work with Anderson’s new electronic medical records system, and the cancer center is now seeking bids to find a new contractor.

IBM spun a story about how Watson could improve cancer treatment that was superficially plausible – there are thousands of research papers published every year and no doctor can read them all,” said David Howard, a faculty member in the Department of Health Policy and Management at Emory University, via email. “However, the problem is not that there is too much information, but rather there is too little. Only a handful of published articles are high-quality, randomized trials. In many cases, oncologists have to choose between drugs that have never been directly compared in a randomized trial.

Forbes ran a blog headlined “IBM’s Watson Now Tackles Clinical Trials At MD Anderson Cancer Center.” Forbes stated use in patient care “might come in early 2014.” It quoted an M.D. Anderson doctor saying: “It’s still in testing and not quite ready for the mainstream yet, but it has the infrastructure to potentially revolutionize oncology research.”

Likewise Scientific American asserted: “The University of Texas M.D. Anderson Cancer Center is using Watson to help doctors match patients with clinical trials, observe and fine-tune treatment plans, and assess risks as part of M. D. Anderson’s ‘Moon Shots’ mission to eliminate cancer.”

While IBM has entered into numerous deals to use its artificial intelligence system in healthcare, a company spokeswoman said there’s no published study linking the technology to improved outcomes for patients because “the implementation of the technology is not there yet.”

Artificial intelligence has been suffering from overhype since the 1970s and 80s,” said Steven Salzberg, a professor of biomedical engineering at the Johns Hopkins School of Medicine. “

Sixty-two million was spent on Watson by the University of Texas before the contract was canceled. All of the information we have obtained from other sources around Watson is that Watson does not add value and that IBM lies about what Watson can do.

This has had real impacts on Watson’s usage, as the following quote from the Wall Street Journal explains.

“More than a dozen IBM partners and clients have halted or shrunk Watson’s oncology-related projects. Watson cancer applications have had limited impact on patients, according to dozens of interviews with medical centers, companies, and doctors who have used it, as well as documents reviewed by the Wall Street Journal.”

What Does Watson Tell Us About IBM’s Honesty on AI?

This introduction to Watson describes things that have not occurred. And that Watson has not accomplished as if they have already been completed. 

The following quotes are from Gizmodo in an article titled Why Everyone Hates on IBM Watson—Including the People Who Helped Make It.

Watson Offers A Real Benefit or a Brand?

“Ed Harbour, vice president of Implementation at IBM Watson believes Watson is still unique in its field. “Are there other companies out there that offered AI-based systems and machine learning? Yes, there are,” he said. “However…I believe very strongly Watson is ahead of the competition and we’ve got to continue to push [to make Watson better]. No, I don’t think it’s something that anybody can just do.”

But according to Perlich, data scientists who want to create similar platforms as Watson could possibly pull from various offerings from the likes of Microsoft Azure, Amazon Web Services, or Data Ninja. But what those products don’t offer is the Watson branding. “And everybody’s very happy to claim to work with Watson,” Perlich said. “So I think right now Watson is monetizing primarily on the brand perception.””

That does not seem real. This is not an argument for differentiation. If IBM has invested at least a billion dollars into Watson, why isn’t there a differentiation?

According to Reuters, in 2014, this was the level of investment.

“Jamie Popkin, managing vice president at research firm Gartner, said IBM’s technology significantly improved how information can be used and managed. “I think they’ve developed something that takes us to the next step where information management needs to go,” said Popkin.

IBM said it decided to establish the unit because of strong demand for cognitive computing.

“We have reached the inflection point where the interest is overwhelming and we recognized we need to move faster,” said Stephen Gold, vice president of Watson Business.

Watson will be deployed on Softlayer, the cloud computing infrastructure business IBM bought last year.

According to Gartner, by next year there will likely be a large and growing market for Watson-derived smart advisors and it said that Crédit Agricole predicted that these systems will account for more than 12 percent of IBM’s total revenue in 2018.”

Curiously, none of this came to pass, and Gartner once again fails on another prediction. And one wonders if being paid by IBM may have influenced this accuracy level.

Watson as the Donald Trump of AI?

“IBM Watson is the Donald Trump of the AI industry—outlandish claims that aren’t backed by credible data,” said Oren Etzioni, CEO of the Allen Institute for AI and former computer science professor. “Everyone—journalists included—know[s] that the emperor has no clothes, but most are reluctant to say so.”

Etzioni, who helps research and develop new AI that is similar to some Watson APIs, said he respects the technology and people who work at Watson, “But their marketing and PR has run amok—to everyone’s detriment.”

This is a delicate way of saying that IBM has been habitually lying about Watson.

IBM’s Moonshot and Curing Cancer?

“The designer thinks that false hope came from the Watson ads. For instance, one commercial depicts two doctors in a rural hospital that can do genomic analysis thanks to an intelligent black box that advises the doctors. In another commercial a soon-to-be seven-year-old talks to a fictional square about how she’s not sick anymore. After Watson reads her health data she asks if Watson is a doctor. “No, I help doctors identify cancer treatments.” Watson responds, as the copy on the screen reads: “IBM Watson is helping doctors outthink cancer, one patient at a time.”

“Outthink cancer” is deceptively vague. Rometty was even more vague in a 2015 Wall Street Journal interview. “We will change the face of health care,” Rometty told writer Monica Langley. “If you think solving cancer is cool, then we’re cool.””

This sounds very deceptive. Has IBM Watson cured cancer? If it has, IBM should come out and say this. It is unclear what outthinking or solving means. Has IBM solved cancer?

What was the observation of one doctor on IBM’s Watson?

“This product is a piece of shit” wrote a doctor at Florida’s Jupiter Hospital regarding IBM’s flagship AI program Watson, according to internal documents obtained by Stat.

Ethical Problems with IBM’s Claims Around Watson?

The experience meeting the hopeful patient made the designer view the company in an entirely different light. “I would not put money on Watson helping patients on a grand scale,” the designer said. “IBM needs to be held accountable for the image that it’s producing of its successes compared to what they’re actually able to deliver, because at a certain point it becomes an ethical issue…You’re telling cancer patients that they should have a higher feeling of hope about their outcome and then under-delivering on that—to me, that’s just dirty.”

It seems like this ethics would apply outside of medicine as well. Oddly, lying is often considered harmless if a person’s health is not put at risk, but deception is a serious problem if health is put at risk. This seems to translate to ethics only applying to software sold to the medical industry.

“Another former employee who worked as a design researcher lead at Watson for Oncology also said they were uncomfortable with how commercials portrayed the platform. “You watch those commercials and you think it’s finding new ways to cure cancer,” the designer said. “Why confuse people and make them think it’s going to find something that a physician couldn’t possibly find?… Then you’ve moved into what strikes me as unethical territory when you’re potentially giving hope to people who should never have placed hope in that kind of a system because it’s not a magical box that does that stuff. It’s not a god.””

Did IBM Make AI Mainstream?

“Now, thanks largely to IBM, it is no longer a risk for tech companies to focus on AI. Rather, it is a risk to ignore it. But because IBM wanted consumers to take it seriously in the early days, the company came up with its own flashy, imprecise branding for the fantastic new technology. As other companies have started investing heavily in AI in a time when it’s safer to do so, IBM has stayed on the same course, and Watson is trapped in the same black box.”

Yes, but if IBM’s excited the AI market based upon false claims, wouldn’t this be a negative?

They may have become more accepting of AI because they did not sufficiently analyze IBM’s claims. This seems that simply because IBM pushed to sell AI, it has become more acceptable to invest in AI. However, IBM never offered more than claims around AI.

2021 Time to Sell the Watson Divison?

In 2021 IBM announced plans to sell off its Watson division. See the following quote.

International Business Machines Corp. IBM -1.44% is exploring a potential sale of its IBM Watson Health business, according to people familiar with the matter, as the technology giant’s new chief executive moves to streamline the company and become more competitive in cloud computing.

IBM is studying alternatives for the unit that could include a sale to a private-equity firm or industry player or a merger with a blank-check company, the people said. The unit, which employs artificial intelligence to help hospitals, insurers and drugmakers manage their data, has roughly $1 billion in annual revenue and isn’t currently profitable, the people said.

Its brands include Merge Healthcare, which analyzes mammograms and MRIs; Phytel, which assists with patient communications; and Truven Health Analytics, which analyzes complex healthcare data.

Watson was one of IBM’s highest-profile initiatives in recent years and a big bet on the growing healthcare sector, though results disappointed in part because physicians were hesitant to adopt artificial intelligence. – Wall Street Journal

Notice the last paragraph. It is, of course, not true. The primary reason was Watson was ineffective.

The WSJ notes how IBM built the business.

The company spent billions buying up a collection of health-related businesses that are now part of IBM Watson Health, with the aim of combining them into a vast store of patient data and applying algorithms to extract useful insights.

IBM paid around $2.6 billion for Truven in 2016, almost $1 billion for Merge Healthcare in 2015 and around $230 million for Phytel, according to FactSet. Price tags for other acquisitions weren’t disclosed. – Wall Street Journal

Each of these acquisitions was made with the normal fanfare of how it would help IBM change medicine.

The following article notes how IBM has been reducing its investment in Watson.

Two years ago, IBM started winding down sales of Watson for Drug Discovery to pharmaceutical companies, because it wasn’t yielding big enough financial returns. Before that, the general manager of the division also stepped down for a different role at the company. – Med City News

And the following quote covers the same terrain as earlier quotes as to what a bad fit IBM and IBM’s approach is to medicine.

“To date, there’s been far more heat than light,” wrote David Shaywitz, founder of health-tech advisory firm Astounding HealthTech. “There’s a lot of complexity to health data that requires domain expertise to understand, and just sticking a lot of values in a data lake or data swamp and then setting algorithms loose on it hasn’t proved especially productive to date.” – Med City News


Additionally, in a 2017 interview with MedCity, a former IBM employee who worked in the company’s life sciences group explained that even though marketing budgets were large, the talk never materialized into a tangible off-the-shelf product. In the article, the employee said he has heard dissatisfaction from his former colleagues. “There’s a lot of frustration there. A lot of infighting and a lot of power jockeying and a lot of politics going on,” he said. “So people are getting fed up and leaving left and right.”

Last summer, IBM verified a round of layoffs impacted its Watson Health unit. – Med City News


“There’s a lot of money in marketing and there are a lot of ads on TV but I don’t actually see the products. Anytime anyone would want to see a product roadmap or wanted to see what the future is or when it was coming out, we never really got that timeline.”

He explained that the promise of AI integration into products was dangled to him routinely but never materialized. Apparently, every six months, they would be told that it’s coming, but six months would come and go with nothing to show for it.

“It was all proof of concept,” he said.

He reiteraed that he hasn’t seen any commercialized off-the-shelf AI product and that most IBM Watson efforts are simply proof-of-concept.

The criticism comes as IBM Watson Health faces scrutiny over how it has represented AI capabilities as revolutionizing and fundamentally transforming healthcare, especially clinical decision making. A clinical bioinformatics expert explained why IBM Watson Health may have a steep hill to climb when it comes to doing just that. – Med City News

So this a division that has lied in the most extreme fashion to its current and potential customer base. Watson is one of the few failed technology programs that has been so bad, and it has received coverage in many media outlets. The best term for Watson at this point is “damaged goods.”This is a bad deal unless the price is meager. The only reason IBM sold Watson to companies is that it can use the IBM brand and network to lie to prospects about Watson. Several years ago, those lies had more power because IBM’s lies had not yet been exposed. IBM may have several customers still paying IBM based upon earlier contracts and will soon get out from under those contracts. This explains the decline in revenues and would also explain the desire the sell the business. IBM can claim the $1 billion in revenues — while hiding the fact that its customers getting out from old contracts and that its pipeline of new business has shriveled. Watson’s brand is now negative, which means that whoever acquires the assets is probably better off changing the name. Therefore, the price would not include brand equity.

Furthermore, the argument that IBM wants to focus on something else (cloud services and AI in this case) does not make any sense. And it makes no sense for the following reasons.

  1. IBM has always focused on many business lines. Its consulting group by itself focuses on many areas of IT consulting.
  2. Isn’t Watson AI? If IBM’s AI did not work with Watson, why will IBM’s AI work in other areas?

But the question must be asked. Wastons was going to revolutionize medicine. IBM was adamant about this happening. So, why, after all of those promises, would IBM want to sell this business? There seems to be not only a chasm between what IBM promised to individuals customers but what Watson was promised to be versus the current state of 2021, where Watson is an exposed and declining business that IBM wants to get out of.


IBM has been lying about Watson AI for over ten years.

It has spent billions on Watson and had problems understanding how to train Watson to solve medical research problems and failed to harmonize different data sets. The curious thing is that IBM continues to sell AI projects. IBM claims to have 20,000 AI projects ongoing. However, these projects have been sold on false promises. IBM does not possess any AI capabilities that other entities in the space do not own, and the field of AI is filled with false claims. Even if a company employs many people familiar with running significant AI/ML algorithms, there is little evidence that these algorithms work. There are further problems with formatting data as it turns out that data lakes are even more challenging to convert into a usable form than previously thought.

All of this occurs in an environment where far more proven forecasting methods often languish due to a lack of funding, unable to match the promises, and the “sexiness” level of AI.

A Hypothesis, No AI Company, Wants To be Tested

Even significantly into the AI bubble, there is yet much evidence that AI meets the hype. Every time an example of AI failing is found, industry sources that make money on AI tell these observers that the failure is not relevant. IBM had over ten years and enormous resources and could not make a useful AI space product. IBM has promised that its clients that have far less to spend on such projects will benefit immensely from hiring IBM to implement AI projects.

Why would these clients be able to accomplish this if IBM itself went down in flames on its own internal AI project?

Previously winning our Golden Pinocchio Award for lying about Watson.

Non-Stop Lying About AI by IBM

These videos show more lying on the part of IBM about AI.

AI Can Change Everything in Insurance?

This was previously where we showcased an idiotic video on how AI would change insurance. Perhaps due to embarrassment, it was taken down by IBP.

AI for Diabetes?

This video has been removed by IBM from YouTube.

IBM proposes that shopping for fresh fruits and fresh vegetables requires using AI. And that taking medications also requires AI.

IBM and Ethics???

IBM is a highly unethical company that, for one — can’t stop lying about AI. IBM adds little value to projects globally and uses underhanded account control tactics to drive its revenues. So it is curious to see the term “IBM” and “Ethics” in the same sentence.

This video, which has previously lied massively about Watson, lies more about helping governments use IBM’s health care Watson solution, which does not, in fact, work.

Watson AI for Oncology?

Watson for health care has been shown to add no value and was removed from the several university hospitals it was tested. IBM made promises around curing cancer, and the conclusion is that not only did Watson not cure cancer, but it also did not even provide any value in fighting cancer.