IBM Contemplates Watson Health Business Divestment To Focus On Cloud: WSJ

International Business Machines Corp. (NYSE: IBM) is contemplating the divestment of its IBM Watson Health business to focus on its core cloud computing business, the Wall Street Journal reports.
The company is exploring options, including its sale to a private-equity firm sale or industry player or a merger with a blank-check company.
IBM has to catch up to its cloud computing peers like Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN), which are already in the trillion-dollar valuation club.
Watson Health employs artificial intelligence (AI) to assist hospitals, insurers, and drug makers for data management with $1 billion in annual revenue, and it is not yet profitable. Its popular brands include Merge Healthcare, Phytel, and Truven Health Analytics.
WSJ notes that the valuation isn't clear yet, and there may not be a sale.
Watson was one of IBM's significant initiatives in recent years, as the company made billon dollar bets in acquiring health-related businesses that are now part of IBM Watson Health.
With physicians hesitant to adopt AI, Watson Health's results have been less pleasing than IBM anticipated.
Price action: IBM shares were up 0.64% at $121.50 in the pre-market session on the last check Friday.