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Seth Wenig / AP

A debate rages in the tech community over whether IBM's Watson computing system is all hype, or the source of real and potential advances in the science of artificial intelligence. Venture Capitalist Chamath Palihapitiya, for instance, has called Watson a "joke" that is the product of IBM's PR operations rather than serious AI science.

MIT's Tech Review, however, recently argued Watson "will be a leader in applying AI to health care's woes," and that if it hasn't achieved hoped-for breakthroughs yet, it's only because "it needs certain types of data to be 'trained,'" and that this data has been difficult to access—a problem that all AI-intensive firms face, not just IBM.

Wall Street is skeptical: Just 5 analysts of 21 tracked by Money.net have a buy rating on IBM stock, while Jefferies analyst James Kisner cut his price target for the company again Tuesday, from $135 to $125, based on his skepticism of Watson. The stock was trading at $153.81 as of publication.

Kisner writes in a note to clients that "While IBM offers one of the more mature cognitive computing platforms today," it is complicated and expensive for enterprises to implement because Watson "has exacting standards when it comes to data enterprises can feed it." Kisner also notes:

  • IBM has been focused on promoting Watson to the investment community, but refuses to break out financial information like revenue derived from the program.
  • "IBM appears outgunned in the talent war" for AI experts, beaten out by rivals like Amazon.
  • Even in the rosiest estimates for revenue driven by Watson, Kisner estimates that massive investment in the project would barely recoup the cost of that capital.

Wherever you fall in the debate over whether Watson represents the state-of-the-art in artificial intelligence, many of Wall Street's top analysts say the profits and losses that result from the project will be disappointing.

Go deeper

Updated 15 mins ago - Politics & Policy

Harris breaks tie as Senate proceeds with lengthy debate on COVID relief bill

Photo: Caroline Brehman/CQ-Roll Call, Inc via Getty Images)

The Senate on Thursday voted 51-50 — with Vice President Kamala Harris breaking the tie — to proceed to debate on President Biden's $1.9 trillion coronavirus rescue package, likely setting up a final vote this weekend.

The state of play: Sen. Ron Johnson (R-Wis.) forced Senate clerks to read the entire 628-page bill on the floor, which took nearly 11 hours and lasted until 2:05 a.m. Friday. The Senate then adjourned and is expected to reconvene at 9 a.m. to debate the bill before considering amendments.

1 hour ago - Health

Cuomo advisers reportedly altered July COVID-19 nursing homes report

New York Gov. Andrew Cuomo. Photo: Seth Wenig/AFP via Getty Images

New York Gov. Andrew Cuomo's advisers successfully pushed state health officials to exclude certain data on the number of COVID-19 nursing home deaths from a July report, the Wall Street Journal reported late Thursday.

Why it matters: The changes resulted in a "significant undercount of the death toll attributed to the state’s most vulnerable population," the WSJ wrote.

Ro Khanna wary of Biden approach on Middle East

Rep. Ro Khanna. Photo: Cody Glenn/Sportsfile for Web Summit via Getty Images

An outspoken progressive Democrat is wary of President Biden’s approach to the Middle East, arguing it’s like “conceding defeat of the aspiration” to win a Nobel Peace Prize.

Why it matters: A number of members of Biden’s own party dislike his Middle East strategy, as his administration signals the region is no longer the priority it was for President Obama and his predecessors.