While giving a talk at a conference in Australia in the mid-2000s, IBM Research's lead scientist for the advanced organic materials group, James Hedrick, had an encounter that would make him rethink his career. At one point, Hedrick--who holds more than 100patents--took a question from a woman in the audience. It wasn't what he was expecting. "Why are you wasting your time with all this electronics stuff?" asked Dr. Yi Yan Yang, who works at the Institute of Bioengineering and Nanotechnology in Singapore. "You need to work with me." That evening, Yang filled Hedrick in on how she was using high-tech nanomaterials for medical purposes. "She was absolutely right," Hedrick recalls. "I was wasting time doing just semiconductors."

The result was IBM's unusual nanomedicine program, an ongoing collaboration between Hedrick's team at the Almaden, Californiabased IBM Research and Yang's group of researchers in Singapore. The project is tackling a range of ambitious projects: creating better antimicrobial and antifungal agents, new methods of drug delivery, and novel ways of combating such diseases as HIV/AIDS and tuberculosis. It may seem strange that computer-hardware giant IBM is pouring resources into experimental nanomedicine, but it's part of a larger trend within the company. "There is a huge group of IBMers who think we should be using our intellectual know-how to address global problems," says Spike Narayan, director of IBM Research's science and technology group. "As we've pushed the boundaries and engaged with other disciplines, we've found that some of our capabilities in materials and nanotechnology are very relevant in addressing challenges related to water, energy, the environment, and health care. That's the motivation."

Although it has yet to yield a commercial product (Narayan says several joint ventures are in the works), the program also makes sense from a business perspective. Even as the price of computing power keeps falling for consumers, R&D and manufacturing costs are steadily increasing for semiconductor producers. That's squeezing profits: Between 2000 and 2012, IBM's hardware business went from contributing 35% of the company's pretax income to just 14%. Perhaps that's why in February 2014, Big Blue reportedly hired Goldman Sachs to explore a potential sale of its semiconductor operation. New areas such as nanomedicine could offer a way for IBM to continue profiting from its cutting-edge research in nanomaterials even if it does get out of semiconductors. "Now we have an ITcentric focus," says Narayan, "but there's no reason we couldn't be more materials-focused, providing enabling technology for other companies."

The nanomedicine group's first big breakthrough was the creation of polymer-based nanoparticles that can target and kill MRSA, a potentially deadly drug-resistant bacterium. The nanoparticles engineered by the IBMSingapore team--dubbed "ninja particles"--use electrostatic attraction to target infected cells. Because the polymers used to create ninja particles are biodegradable, they pass out of the body once they've done their job. While the particles haven't yet been submitted for FDA approval, IBM is working with pharmaceutical, consumer-products, and medical-device companies to explore applications.

In the past year, the pace of innovation has accelerated. The Hedrick-Yang group published a paper in December that describes a method for breaking down PET--the stuff plastic bottles are made of--and reconstructing it into a nanofiber that can kill fungal infections on contact. In the lab, these nanofibers were more effective in fewer doses than conventional antifungal drugs, in addition to being nontoxic and biodegradable. Since the polymers used in both chip manufacture and nanomedicine are generally derived from petroleum, the ability to instead start from recycled material could reduce industrial consumption of oil and gas while providing a new use for plastic waste.

Hedrick and his partners have also made headway in drug delivery, coaxing nanoparticles to self-assemble into a gel-like material that can encapsulate molecules of a drug and release them at a particular location in the body over an extended period of time. When the Singapore team encapsulated the breast cancer drug Herceptin into the hydrogel and injected it into animals, their tumors shrank more than 75%, and the drug remained active and effective in the bloodstream for a month after a single injection. Tumors in animals given a regular IV injection of the drug didn't shrink at all, according to results published in November 2013.

Potential medical and consumer applications for materials coming out of the nanomedicine program are practically limitless: they could be injected; applied as a topical gel to treat wounds and infections; included in products such as soap, hand sanitizer, and shampoo; or applied as a germ-fighting coating on everything from medical devices to cutting boards and toothbrushes. Before they can be commercialized, all of these products will require approval by either the EPA or FDA, so rather than bring products to market on its own, IBM will aim to collaborate with partners that have more regulatory and manufacturing expertise. "Increasingly, in these nontraditional, interdisciplinary spaces, no one has all the capabilities," says Narayan. "As we jointly develop [intellectual property], there will be all kinds of royalty and other revenue streams coming out." The first product to make it out of the lab will most likely be an antimicrobial material to clean surfaces in hospitals.

For Hedrick, pivoting from his comfort zone in silicon hardware has been a learning process. "When I first started this, we went to some major pharma companies, and I got my backside handed to me pretty quick," he says. "Now I feel very comfortable going into a room with scientists and executives and rattling off proteins and numbers and names. A lot of the time [when he's not in meetings], though--I kid you not--I have Wikipedia open on my phone."

Inspired in part by the recent launch of an IBM Research lab in Africa, Hedrick is excited about deploying nanomaterials to fight illnesses that disproportionately afflict the region, including tuberculosis, dengue fever, and HIV. He also hopes to look at ways to use nanocontainers to deliver drugs across the blood-brain barrier--a major challenge in treating conditions such as Alzheimer's and Parkinson's. "Even three years ago, I would have been surprised by what we've been able to accomplish so far," he says. "IBM Research has given us significant latitude and freedom. Because they've always kept the lights on, we're able to address these grand challenges in a unique way."

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