Watson is one of the first big steps toward machine intelligence using existing technologies. What it was designed to do was to parse a question into component parts, analyze the components, find matching results, and finally attach a value to those results so that the most likely answer could be brought to the surface.
Watson was crippled to play in the "Jeopardy" TV show because it needed to be as limited as a human. So it had a physical rather than electronic connection to the buzzer, and it was only allowed to use information loaded into local storage. It couldn't use the Web or even IBM's vast knowledge databases. Neither of those limitations will be applied to the eventual productized system.
A division was created around Watson and an initial market identified for it -- the medical market. When given a series of symptoms, Watson will identify the top likely causes, which will then define a series of tests to confirm the actual diagnosis.
This is as opposed to current diagnostic practices, which involve a doctor or doctors listening to patients describe their symptoms and then guessing, based on knowledge and experience, which causes are most likely. The problem with this way is that people suck at this approach, which is why so many people are misdiagnosed.
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