The most interesting part of Bridget van Kralingen's appearance at the Fortune Brainstorm Tech conference this week was when the IBM exec held up a chip she said was made with graphene instead of silicon, and could run your smartphone for a week without a charge.

Of course, this isn't a real chip yet, but Kralingen, SVP for Global Services at IBM, said it's an example of what IBM hopes to achieve through a $3 billion investment in chip technology over the next five years. IBM wants to look beyond silicon, and is working on graphene to create a chip that is only 1 atom thick. Such chips could make your phone run longer and faster, she said. In addition, IBM is also looking at quantum devices for parallel calculations, photonics replacing copper for connections, and "synaptic computing" that aims to work more like a neural network in your brain.

(Of course, other companies are also investing a lot in chip technology. To put this in perspective, Intel spends more than $10 billion on R&D annually.)

Most of the conversation, moderated by Fortune's Jessi Hempel, focused on the transformation of IBM, a $189 billion company with 420,000 employees. Van Kralingen said the company is betting on cloud, big data, and "engagement," which seems to be her term for services that use the new technologies.

Van Kralingen said IBM now has the world's largest analytics practice, with 15,000 business analytics consultants. In addition, she said, it is now the largest digital agency, creating interactive experiences for websites and mobile, including commerce and marketing capabilities.

With Watson, IBM is developing a "cognitive network" of devices that will increase and enhance the collective intelligence of the world rather than an intelligent device that will augment decision making. For instance, she said, the Watson currently used in medical decision support is focused on giving you three or four options with different confidence levels. This is moving toward a real dialog, where the system will ask questions of doctors.

As part of this process, IBM is investing $100 million to create an open ecosystem. Van Kralingen said Watson today has IQ but little EQ (emotional intelligence), so IBM is trying to make Watson able to respond and interact in a way that is more tailored to your personal style. As part of this, IBM bought a startup that helps people shop using a tone and style that fits you. She said this kind of intelligence was better for coaching, learning, or even getting patients to stick to medical protocols.

She said Watson is a platform for experimentation, and mentioned examples of using Watson for giving insurance advice, or helping individuals going through life-changing events choose health and life insurance. She also talked about using Watson in "Project Lucy" in Africa to help fight disease, noting that 22 percent of cervical cancer cases are in sub-Saharan Africa.