So, is Watson an Artificial Intelligence? I don't think so. He has been stuffed with facts and designed to be able to parse English words and phrases to try to figure out what fact is being sought, but for one thing, he's not really thinking, and for another he sometimes misses wildly. His answer to a clue about a specific brand of shampoo was “butter.”
The first game's Final Jeopardy illustrates Watson's limitations. The category was US Cities and the clue was that this city's largest airport was named after a World War II hero and its second largest was named after a WWII battle. The answer was Chicago, and both Ken and Brad got it right. They didn't really need to know that O'Hare was a war hero (I didn't know that!). They just needed to think of a city where the largest airport has a person's name and the second largest has a place name that could be a battle. Watson guessed Toronto. If Watson knew the airport there was named for Lester B. Pearson, he should have known the man didn't fight in WWII. And he definitely should have known Toronto isn't a US city!
What Watson reminds me of is a very good, very old Spencer Tracy/Katherine Hepburn movie called Desk Set, about a TV network's library (except they call it just the reference department, because otherwise Katherine Hepburn would be playing a librarian, and we can't have that!) that is “computerized” by something called EMERAC that looks suspiciously like an early computer known as ENIAC. The movie is hilarious and brilliantly clever except that the writers knew next to nothing about computers. A small stack of cards is supposed to contain all of Bartlett's Quotations; that would have taken a roomful of Hollerith cards. And they had a console where people typed plain English questions into Emerac and got plain English answers back.
So, in a way, Watson has evolved to what we thought we had in 1957! Besides that, Ken has a much better sense of humor. -)
Addendum Ken Jennings reflects on playing against a computer in Slate, and Tor.com has a post about why Watson is so important ..