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By Bloomberg

IBM is buying machine-learning systems maker AlchemyAPI Inc. to bolster its Watson technology as competition heats up in the data analytics and artificial intelligence fields.

AlchemyAPI’s software tools are used by 40,000 developers to analyze and classify text and images, and the technology gets smarter the more it works. The end result, analyzing information to identify important details and patterns, is similar to what International Business Machines Corp.’s Watson is marketed to do now.

IBM said Wednesday that it’s adding services to Watson at a time when it relies on new offerings like data analytics and cloud computing for growth. Meanwhile, competitors from Google Inc. to a slew of startups are working on machine learning technology.

“This extends the portfolio” of Watson’s services, said Stephen Gold, vice president at IBM Watson Group. Denver-based AlchemyAPI “has a tremendous following. The 40,000-plus network of developers that have built on top of the platform -- that will really help accelerate our own ecosystem.”

IBM, based in Armonk, New York, currently has 160 partners developing applications on Watson’s platform, with more than 3,800 pending, the company said last week in a statement. IBM didn’t disclose terms of the AlchemyAPI acquisition.

Seeking Growth

After three straight years of falling revenue, IBM is relying on newer businesses for growth. Chief Executive Officer Ginni Rometty projected last week that sales from new initiatives would reach $40 billion in 2018 -- just less than half of total revenue last year -- though she declined to say how much would come from Watson.

Rometty has touted Watson’s ability to analyze huge amounts of information and answer questions in natural language. It invested about $1 billion to create a new business unit focused on the technology.

At the same time, smart technology competition is heating up. Last year, 16 artificial intelligence companies were funded for the first time, up from two in 2010, according to data compiled for Bloomberg News by researcher CB Insights. Startups, including those in machine learning or deep learning, drew $309.2 million of investments last year, up from $14.9 million in 2010.