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Does anyone know what it is about the Watson algorithm that requires a super computer? Sure they say it's searching billions of documents, but I'd be happy with a scaled down version that just searches Wikipedia.

If it doesn't have to win at Jeopardy couldn't they make a good enough version running on something more quotidian?

If you just want to search wikipedia, why use Watson?
Because I want to search wikipedia using natural language.
It looks like the most popular (or maybe just hyped) NL search engines for wikipedia are now down, PowerSet and AskMeNow. This one still works http://host.expertsystem.it/wiki/Default.aspx but it's a little slow.

To answer your first question: Watson doesn't just search, it tries to understand all the information. It runs several hundred different algorithms in parallel and then weighs each of them for relevance. That said, you could get away much less hardware. For example, during the game the entire database was held in 16 TB of RAM because disk accesses were considered too slow. It had to beat Jeopardy champions in 3 seconds or less.