IBM to divest AI business from Watson Health

IBM to divest AI business from Watson Health

New York, Jan. 12, 2022

Axios reports that IBM is looking to sell its AI business, IBM Watson Health, for a price of around $1 billion. The company has reportedly spent $4 billion to build its AI health division, but wants to exit the healthcare market.

IBM recently hired BofA Securities to find a buyer. At least one strategic buyer and a handful of private equity firms have expressed interest.

Watson Health, which was expected to use IBM’s Watson AI to solve healthcare challenges, has reportedly failed to meet the company’s expectations.

The unit’s brands include medical imaging specialist Merge Healthcare, data and analytics company Truven Health Analytics and population health specialist Phytel, which IBM acquired for a total price of $3.8 billion.

Reports of the sale plans first surfaced last February. At the time, the company was said to generate $1 billion in annual revenue and was not profitable. Insiders pointed out that applying AI techniques to diagnose or treat complex health problems is challenging because access to comprehensive data is poor.