IBM's Jeopardy!-winning artificial intelligence platform Watson has already branched out into highly advanced customer service, assisting doctors and opened its programming code to outside researchers. But today, Watson is getting its biggest show of support yet from IBM. This morning, the company announced the formation of the Watson Group, a new $1 billion-division within IBM that will focus specifically on helping outside developers and other companies create new apps for Watson.

The 2,000-member group, which has been quietly active since November, is headquartered in Astor Place, the heart of Manhattan's "Silicon Alley," close to numerous other startups and New York University. The idea is to tap into the local talent and help other businesses find new uses for Watson. IBM has committed $1 billion to the venture, with $100 million in venture funding for other companies available now.

The company also said it's shrunk the Watson supercomputer hardware from the size of a room to a stack of three pizza boxes, and is teaching the system to watch and understand the content of videos, not just the associated metadata. Similarly, IBM has taught Watson how to respond to the queries people give it with a wider range of responses rather than just text, including drawing pictures. "The era of machine-human collaboration is dawning now," said Michael Rhodin, IBM's senior vice president in charge of the Watson Group, during a press event this morning. IBM also released the following ad promoting Watson's capabilities and potential.

So far, Watson's first few applications have been focused on medicine and healthcare. It's partnered with several notable cancer treatment centers, scanned hundreds of millions of medical articles, and can now recommend personalized treatment for individual cancer patients, providing a prioritized list of potential options.

"Watson has learned how to retrieve all the relevant information that's necessary for a personal decision of that patient and their specific circumstances relative to their cancer – all the medical information that exists in the world, as well as all the personal information that exists in that person's healthcare record," Rhodin said. He also said that IBM has developed a new system called Watson Path "that enables the system to reason," like a human being. "It helps you think through things," Rhodin explained.

That same capacity has also made Watson useful in calling centers and for monitoring the flow of money around banks, but the Watson group believes that's just the tip of the iceberg of what the system is capable of. "Watson's come a long way," Rhodin said. "But think of this really as just as an engine in a cognitive system: it's not the end state, it's the beginning state."