IBM Acquires AlchemyAPI to Bolster Watson

In an effort to grow its cognitive computing platform, Watson, IBM announced this week that it has acquired deep learning platform AlchemyAPI. Terms of the deal were not disclosed.

AlchemyAPI offers a suite of machine learning tools that help developers understand text-based information. All of these tools, including entity extraction, sentiment analysis, keyword extraction, and concept tagging, are available via API. AlchemyAPI also offers an API-based computer vision solution that developers can use to identify objects in photos without the aid of text metadata. 

Founded in 2005, AlchemyAPI is one of the earliest players in the natural language processing space. Thanks to the proliferation of Big Data and the desire on the part of companies large and small to process and understand large volumes of information, there is now a fast-growing ecosystem of companies offering deep learning and natural language processing solutions as API-based services.

For IBM, which is looking to bolster Watson, one of its most innovative and exciting technologies, AlchemyAPI was a natural acquisition target. “IBM continues to invest in Watson’s core technology and cloud development platform, amplifying a robust Watson ecosystem where third-party organizations are creating new businesses and solutions powered by Watson,” IBM’s senior vice president of the Watson Group, Mike Rhodin, explained in a press release. “Our ability to draw upon both internal and external sources of innovation, from IBM Research to acquisitions like AlchemyAPI, remain central to our strategy of bringing Watson to new markets, industries, and regions.”

IBM’s big bet on Watson

According to IBM, members of the Watson developer ecosystem have built 7,000 applications. IBM says that it is investing $1 billion into Watson, and has earmarked $100 million for venture investments in companies that are part of the Watson ecosystem.

With so much at stake, it’s not surprising that IBM is willing to pay for innovative technology and non-organic growth. It gets plenty of both with AlchemyAPI, which has amassed an ecosystem of 40,000 developers in 36 countries who are generating billions of API calls each month.

Of course, such acquisitions are not without risk. Depending on how it is handled, a change of control can alienate developers and, in the past, we have seen API providers gobbled up by larger companies only to kill them soon after. For example, Facebook angered developers when it purchased and subsequently shuttered

Such a scenario won’t occur here, says AlchemyAPI founder and chief executive officer Elliot Turner. “Users will not see any service disruption as a part of this process,” he assured AlchemyAPI customers in a blog post. “AlchemyAPI is becoming part of the IBM Watson product and developer portfolio. We’re excited to continue making AlchemyAPI available to both our paying and free users, as well as the broader IBM customer base. In coming months, you’ll see exciting developments in the form of new APIs, natural language processing, computer vision innovations, and more. With the additional resources of IBM behind us, we expect to offer even better service and support to our customers.”

Turner’s statements suggest that Watson could effectively become a warehouse of related APIs. This notion is also supported by Big Blue’s 2014 purchase of Cognea, maker of a virtual assistant technology.

At the time, IBM’s Rhodin explained, “In addition to the conversational services we have been developing within IBM, we have also acquired the startup, Cognea, which offers virtual assistants that relate to people using a wide variety of personalities — from suit-and-tie formal to kid-next-door friendly. We believe this focus on creating depth of personality, when combined with an understanding of the users’ personalities, will create a new level of interaction that is far beyond today’s ‘talking’ smartphones.” IBM, Rhodin wrote, planned to make all of its homegrown and acquired conversational services available to developers through the Watson platform.

With a billion dollars in investment behind it and one of the leading deep learning platforms now being brought into its fold, IBM’s Watson looks to be shaping up as a bona fide API platform worth keeping an eye on.

Be sure to read the next Machine Learning article: Microsoft Guess Your Age Site Proves Fallible, Misses Opportunities


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