The rise and subsequent decline of IBM Watson Health represents a seminal case study in the intersection of legacy industrial computing, the aggressive financialization of medical data, and the premature deployment of narrow artificial intelligence in high-stakes clinical environments. Once heralded as the panacea for the complexities of modern oncology, Watson Health was positioned by IBM leadership as a "moonshot" capable of democratizing elite medical expertise through the

This report argues that the feared "burst" of the healthcare AI bubble is not merely a cyclical downturn in venture sentiment but the mathematical inevitability of three converging forces: a regulatory cliff that imposes hardware-grade compliance costs on software startups, a maturation of financial obligations incurred during the peak of the hype cycle, and an operational "reality check" within health systems that is rapidly closing the window on the pilot-driven sales model