I found Watson to be pretty disappointing.
For one thing, it's big advantage was inhuman button-pushing speed since an actuator is much faster than a human finger. Now, one might argue that pushing the button is part of the game, but to that I would respond that reading the puzzles off of the right screen is part of the game too and Watson didn't have to do that -- the puzzles were inputted in the form of a text file. Also, travelling to Los Angeles is part of the game and Watson didn't have to do that either. If the game had been played in Los Angeles instead of New York, then all of Watson's responses would have been delayed by a few hundredths of a second.
Another problem is that a lot of the puzzles on Jeopardy don't actually require much intelligence to solve particularly if you can write a specialized program for each puzzle category. For example, I would guess a competent computer science grad student could pretty easily write a program that did reasonably well in "state capitals" And of the puzzles which do require some intelligence, the two human champions will split the points.
I'm not saying that Watson wasn't impressive, just that it's win was not convincing.
Watson was not specialized for different categories. It would learn categories -- during a game, after seeing question-answer pairs from it. It ignored category titles, because they couldn't find any way to get that to work. (Hence "Toronto" when the category was "U.S. cities".)
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