International Business Machines Corp. has designed a computer chip it says emulates the brain's cognitive powers.

The technology, known as cognitive computing, is programmed to analyze complex information, create hypotheses, and remember and learn from the outcomes, replicating the brain's functionality.

The company said that it is an “unprecedented” step in creating intelligent computers.

“Future applications of computing will increasingly demand functionality that is not efficiently delivered by the traditional architecture. These chips are another significant step in the evolution of computers from calculators to learning systems, signaling the beginning of a new generation of computers and their applications in business, science and government," said Dharmendra Modha, project leader for IBM Research.

The chip could manage water supply through real-time data analysis and pattern recognition. It has a network of sensors and actuators that constantly record and report metrics such as temperature, pressure, wave height, acoustics and ocean tide, and issue tsunami warnings. It could also help grocers identify bad products.

“Research like this has been going on for decades, but this marks the beginning of commerce, industry and profits for cognitive computing,” Richard Doherty, research director at The Envisioneering Group, a technology assessment firm in Seaford, New York, said in an interview. “They’re going to be more like humans and primates than ever before.”

IBM has made two prototype chips using the 45-nanometer manufacturing process. The company has already generated some results from the project, such as walking through a maze, playing a game of Pong, or recognizing patterns in data.

IBM is combining principles from nanoscience, neuroscience and supercomputing as part of a multi-year cognitive computing initiative. The company and its university collaborators also announced they have been awarded approximately $21 million in new funding from the Defense Advanced Research Projects Agency for Phase 2 of the Systems of Neuromorphic Adaptive Plastic Scalable Electronics project.