The Internet of Things (IoT) has already been infiltrated to our everyday life in the forms of smartphones, smart TVs, fitness trackers, health monitoring systems, smart watches, vending machines, smart meters, city traffic, building security systems and much more like this. It has steered the automation to a new high. But IoT alone has limited capability. To reap the actual benefit of IoT, it has to be intelligent. In this chapter, we have reasoned why IoT needs Artificial Intelligence (AI). The intelligent IoT that we discuss here, is termed as the Cognitive IoT (CIoT) . Cognitive IoT uses a new computing paradigm called Cognitive Computing, often popularly dubbed as the third era of computing. Cognitive Computing will make IoT more sophisticated, more intelligent, and more interactive. This chapter essentially focuses on the convergence of IoT with Cognitive AI. In addition to introducing a preliminary idea of Cognitive Computing, the chapter discusses several aspects of CIoT. It explains how Cognitive Computing has been used in IoT through different forms such as Cognitive Network, Cognitive Devices, and Cognitive Analytics. The desirable properties of the CIoT are mentioned. A special discussion is presented on how CIoT has taken automation to a new level. Realizing CIoT is not straightforward for the reason that it is a complex system and is quite different from other computing systems we have been familiar with. The implementation challenges along with the societal and ethical apprehensions of CIoT have been identified and discussed in detail. The business world is showing great interest in IoT and subsequently in CIoT. Considering that, we have highlighted the business values of CIoT and some prospective application areas along with a few prominent use cases. But, will excessive adoption of AI and tendering human-like intellect to inorganic devices be a threat to the human race? Do we need to be warned? A rational discussion on that has been presented before winding up.