Laws are changing to include "software medical devices" in health regulation. The FDA recently recognized this as a gap.
This isn't quite correct - FDA has always regulated software medical devices. It is true however that the FDA is looking a lot closer at software than they did in previous decades, and is releasing guidance (e.g. recently on cybersecurity) that signals intentions moving forward. They definitely have signaled that they don't believe they were focused enough on software.
It's important understand that FDA approval to market is always done in terms of indications for use. You don't approve a device full stop, you approve it (and evaluate it) in terms of the indications. Only in this context can you determine if you have a 510k path (i.e. short cut) or need a PMA (i.e. clinical trial). It is also important to realize that different panels in the FDA (i.e. the type of device you are making) have different evaluation criteria.
So "Watson" is unlikely to ever be cleared per se (it is a tech platform) but you are likely to see individual Watson enabled systems file 510ks for particular indications. If I recall correctly this has already happened.