IBM AlchemyAPI Buy Latest Step to Build Watson AI Analytics Business

At last year’s Mobile World Congress, IBM (IBM), in a move to breathe more life into the vendor’s $1 billion commitment to build a business around its Watson advanced artificial intelligence (AI) system, challenged developers to build applications that could best take advantage of Watson’s technology, offering awards and support to the standout entrants.

The idea, of course, was to kickstart Watson’s makeover into a revenue- and profit-generating business, extending its AI natural language capabilities beyond that of a novelty or showpiece. Ultimately, the plan is to mainstream Watson, and to that end IBM quietly has been building a wide network of associated third-party contributors, including cloud-focused partners, developers, ISVs, SIs, MSPs and others.

Now, just about a year removed from its initial Watson stake in the sand, IBM last week snapped up AlchemyAPI, a 10-year old, Denver, CO-headquartered analytics developer specializing in collecting data from sources such as Twitter (TWTR), news accounts and most recently, images, and analyzing it in ways that make sense and are useful to enterprise customers.

The deal, whose terms were not disclosed, fits in, albeit loosely, with IBM’s stated intention to pursue its so-called strategic initiatives–namely, big data, cloud, mobile and security–going forward. The acquisition surprised some, given AlchemyAPI founder and chief executive Elliot Turner’s vow last September that his company wasn’t for sale.

Two attractive aspects of the deal for IBM is that it gives the vendor access to AlchemyAPI’s network of some 40,000 developers using its tools to build analytics software and it will enable IBM to expand its Watson APIs to help developers embed AI technology into their apps.

“They (AlchemyAPI) bring a very substantial development community and following,” Steve Gold, vice president of IBM’s Watson group, told Reuters. “Plus, they have a very talented group of technologists.”

Gold said IBM will be able to parlay AlchemyAPI’s technology into AI-related business opportunities in healthcare, legal and insurance, all of which generate large amounts of unstructured data and can benefit from analytics technology.

At some point, IBM will fold AlchemyAPI’s technology into its Bluemix platform, Gold said.