No joke, I'd like to see my firm go head-to-head with IBM on A.I., says venture capitalist Palihapitiya

Key Points
  • There's a growing frustration in Silicon Valley over which companies are doing the best work on artificial intelligence, the Social Capital founder says.
  • Palihapitiya — who called IBM's supercomputer Watson a "joke" — said he should have been "more careful" with his words.
Palihapitiya: I'd never buy IBM stock, and here' s why

Venture capitalist Chamath Palihapitiya backed away on Tuesday from his comment that IBM's Watson is a "joke" but insisted his artificial intelligence firm could still defeat Big Blue.

"We've been building a company for seven years now that's also doing something equally productive, and I would say better than IBM," the Social Capital founder and CEO said on CNBC's

"I would love to put us in a head-to-head to see how they do," he added, referring to Syapse, a firm that bills its software as a way health-care providers can deploy precision medicine programs.

On CNBC's "Closing Bell" on Monday, Palihapitiya said, "Watson is a joke, just to be completely honest."

"I probably should have been more careful with my words," he said Tuesday.

But he said, "I have companies that we've been building and incubating for years in things like cancer and diabetes where we're bringing machine learning to the market where we've competed with competitors including IBM."

"There are a lot of people building extremely meaningful solutions who are probably getting somewhat out-marketed" by IBM, he added.

IBM responded to Palihapitiya's "joke" comments early Tuesday.

"Watson is not a consumer gadget but the A.I. platform for real business. Watson is in clinical use in the U.S. and 5 other countries. It has been trained on 6 types of cancers with plans to add 8 more this year," the company said in a statement. "Beyond oncology, Watson is in use by nearly half of the top 25 life sciences companies, major manufacturers for IoT applications, retail and financial services firms, and partners like GM, H&R Block and Does any serious person consider saving lives, enhancing customer service and driving business innovation a joke?"

Palihapitiya said he would never invest in IBM. "I'm in the business of buying things that can grow in meaningful multiples ... over five to 10 year periods." But on the positive side, he said, "That's a business that I think can generate an enormous amounts of cash. I think they'll acquire aggressively."