By the time thousands of capitalists were descending on Omaha for the Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) annual meeting earlier this month, Warren Buffett had revealed he had added to his already large position in IBM (NYSE:IBM). Coincidentally -- or not -- IBM had its own display on the expo floor for the first time ever, and it was extremely popular with shareholders.

One of Big Blue's most promising initiatives is Watson, a cognitive computing system with tentacles in several industries. It was developed to understand natural language and compete on the television quiz show Jeopardy. That multiyear effort paid off with a win over two Jeopardy champions, and the supercomputer is now on to bigger and better things.

Watson takes in vast amounts of data from nearly every available source, interprets and evaluates it for us mere humans, and "learns" as it goes. This makes it ideal for research and discovery in important areas like health care, finance, and even cooking.

I talked with Watson expert Fredrik Tunvall at the Berkshire Hathaway meeting, and in the video below, he explains why Watson has now added the title of chef to its resume.


If you've heard of IBM's cognitive computing system Watson, it's probably because of its successful performance on Jeopardy in 2011, where it defeated famous champions Ken Jennings and Brad Rutter. The one-million-dollar prize -- donated to charity -- paled in comparison to the publicity IBM garnered from that.

In another stroke of PR brilliance, Watson has now become a chef -- something that delighted the 40,000 people attending Berkshire's annual meeting. For the first time ever, IBM had its own exhibit on the expo floor, and Watson -- or at least his human helpers -- were handing out cookies, muffins, and cookbooks.

Now what, you may ask, is IBM trying to accomplish with Watson as a chef? With its ability to read everything humans produce -- from research reports to tweets to science papers -- Watson can find unique ways to combine ingredients that humans never thought of. IBM is using Chef Watson as a metaphor for the medical field.

Fredrik Tunvall, Sr. Client Engagement Leader, Watson CEC: So cooking -- all it is -- we're teaching Watson how to use ingredients and chemical compounds to find new flavor combinations. In the similar way we can do it in cooking, we can do it with something else, like medical science. 

So, think about drug discovery. How do different proteins fit together? How do different genes actually interact with each other so they can find new targets for drugs which can be very valuable to pharmaceutical companies? Another area we're also going into is oncology, and I can actually show you on the iPad how doctors can use this system.

So, the big money as far as IBM is concerned is not in cooking, but in arenas like health care, finance and investing, insurance, and other data-intensive business fields. Here's a fascinating example of what a doctor might see with IBM Watson for Oncology -- developed through a partnership with Memorial Sloan Kettering.

Fredrik Tunvall: What you see here is a patient list. This is all real data. It's just de-identified. The doctor can go in. You see you have a breast cancer patient here. We'll bring back from the electronic medical records -- Watson will read the patient notes and see what attributes are specific to this patient. With this information, he'll look at the medical literature -- millions and millions of documents -- and actually come back with considerations for treatment. 

The doctor can go in and will come back with considerations, color-coded by confidence. The highest confidence has a green color. That means it's probably low-risk and fits this specific patient. Orange color means there is some risk involved. Then the doctor can go in -- and this is important -- and can get the evidence. What did Watson actually read to come up with this consideration? 

So, these are actual articles that Watson read from online publications. The doctors can go in and actually read the articles and they can educate themselves, but also make sure that the system is behaving the way they want it to behave.

So, there's enormous potential out there for Watson. IBM CEO Ginni Rometty once said in a conference call she's hoping for $10 billion in revenue from the unit by 2023. But as a Wall Street Journal article pointed out last year, Watson is off to a slow start revenue-wise.

But we really have no way of knowing for sure at this point, since IBM does not break out Watson's revenue -- and Watson itself is mum on the subject.

Reporting from the Berkshire Hathaway annual meeting in Omaha, Nebraska, I'm Motley Fool analyst Rex Moore.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.