Intel is buying Saffron AI, a startup in Cary, North Carolina that makes a cognitive computing platform that is reminiscent of IBM’s Watson technology. The chip giant announced the deal Monday but did not disclose a price.

Saffron’s software takes in a variety of data on a topic provided by the client and then parses similarities and relationships to “learn” about that topic. Saffron has purportedly created software that mimics human reasoning and memory that it applies to problems for clients as well as its own natural language processing that augments whatever vocabulary the client submits, since many professions have their own industry jargon. The result is a system that helps take in a lot of data and generates insight for clients.

So how does a cloud-based software product that teaches computers to “think” relate to Intel, a chip company?

The future of computing is pretty clear to those who know where to look. With everything from our homes to our factories connected and generating more information than can be stored in a single data center, let alone be processed by a human being, the race is on to build computers that can help people make sense of the digital information that threatens to overwhelm them.

Intel’s INTC role in this digital overload is threefold. First it wants to put as many chips as it can into what are called the edge devices—the laptops, watches, gateways or any devices that we may interact with or that gathers information from the world and feeds it back to the network. In many ways, because Intel missed out on mobile, it lost out on much of this opportunity. However, it is still trying to play here with its Curie platform for wearables and its acquisition of the Basis watch.

The second opportunity is where Intel feels at home, which is in making general purpose chips for the servers that process all of this information and generally power the data centers that comprise “the cloud.”

But the third opportunity is a mix of both of those things and is where the Saffron acquisition enters the picture. As the computer industry demands more from processors, it’s trying to turn what were general-purpose chips into something that’s designed to do a very specific job. This is akin to expecting a short order cook to be a great pastry chef.

At a certain level, an industry demands dedication, and that is happening in computing when it comes to artificial intelligence. That’s one reason Intel is spending $16.7 billion to buy Altera. Altera makes a type of programmable chip that lets a company tweak its silicon whenever it changes its software so the hardware is optimized for the specific code the company is running.

Microsoft uses such chips for its search algorithm today, but another popularly suggested use case for these programmable ships is the algorithms used for artificial intelligence. Thus Intel’s Altera buy is a big bet on dedicated processors for artificial intelligence and that third opportunity. Monday’s Saffron announcement is another investment in artificial intelligence that will fit on both the server side with Altera and also on the device side.

From the blog post announcing the deal:

Saffron offers a fresh look at big data analytics. We see an opportunity to apply cognitive computing not only to high-powered servers crunching enterprise data, but also to new consumer devices that need to see, sense and interpret complex information in real time. Big data can happen on small devices, as long as they’re smart enough and connected. Saffron’s technology, deployed on small devices, can make intelligent local analytics possible in the Internet of Things.

What’s also worth noting is that Saffron’s technology is software, which again drives home the importance of software, even for the maker of a product that underlies pretty much all tech hardware out there.

For information on Intel’s plans to become more diverse check out this Fortune video:

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