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IBM Adds AlchemyAPI to Its Acquisition Portfolio

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AlchemyAPI is IBM’s latest acquisition

On March 4, 2015, IBM (IBM) announced the acquisition of AlchemyAPI to accelerate its cognitive computing applications. AlchemyAPI provides scalable cognitive computing application program interface (or API) services and deep learning technologies. IBM didn’t disclose the specific details of the acquisition.

Deep learning, machine learning, and artificial intelligence have taken the world by storm. Before delving into the acquisition, let’s first take a look at what deep learning is.

To gain diversified exposure to IBM, you can invest in the Technology SPDR (XLK). XLK invests 3.51% of its holdings in IBM.

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Deep learning is a must to get insight into unstructured data

Deep learning is a subsegment or niche of machine learning that is rapidly gaining prominence, as it aims to understand and learn complicated systems like neural networks using algorithm sets. Deep learning technology aids in identifying patterns and traits in music, images, text, and unorganized data sets. Companies like Facebook (FB), Google (GOOG), and Microsoft (MSFT) are pouring funds into deep learning and pushing its researchers to enhance their position in voice recognition and the image tagging space.

Deep learning is a very useful tool for large amounts of complex human-generated data. Types of data where deep learning is of specific significance include text analysis, video and image-based learning, and user behavior, like user patterns on Facebook or Twitter.

AlchemyAPI business overview

Founded in 2005, AlchemyAPI employs around 20 people. AlchemyAPI’s capabilities include entity extraction, sentiment analysis, and language extraction in the natural language processing space. When the company’s services are integrated with computer vision, it can tag images and detect faces.

AlchemyAPI makes money by charging fees based on the transactions conducted through its application programming interface (or API). An API is a web technology that allows apps to share information or features.

The company has raised under $2 million in external funding from Access Venture Partners and Turner. The company’s customers include CrisisNet, Pocket, Spiderbook, Tabelog, and Waggener Edstrom.

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