Conversational AI is an emerging technology that uses artificial intelligence to conduct natural language conversations through messaging, voice, or text. Conversational AI, or chatbots, can understand the intent and context behind a conversation and autonomously respond to users through a conversational interaction. Chatbots are deployed across various sectors like healthcare, e-commerce, BFSI, and travel among others. They are used by organizations to serve their customers in a personalized manner while automating repetitive and mundane tasks at low costs. Some key uses of conversational AI include customer service assistance, marketing and sales assistance, collecting and analyzing feedback, and automating simple workflows.

The global conversational AI market is estimated to be valued at US$ 10.65 Bn in 2024 and is expected to exhibit a CAGR of 22% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the Conversational AI Market Size  are Google, Microsoft, Amazon Web Services, Inc., IBM, Oracle, Nuance Communications, Inc., FIS, SAP SE, Artificial Solutions, Kore.ai, Inc., Avaamo, Conversica, Inc. and Jio Haptik Technologies Ltd.

Key players operating in the conversational AI market are focusing on expanding their product portfolio and capabilities through strategic partnerships and acquisitions. For instance, in 2022, Anthropic acquired Constitutional AI to strengthen its conversational AI capabilities across verticals.

The demand for conversational AI is growing rapidly due to the rising need for personalized customer engagement solutions across industries. Chatbots help organizations streamline their conversations with customers while improving customer service and satisfaction.

Global expansion of the conversational AI market has also increased significantly over the past few years. Major players are focusing on exploring opportunities in high growth markets like Asia Pacific and Middle East & Africa. The rapid adoption of digital technologies in these regions is expected to drive the future demand for conversational AI.

Market drivers

Growth in smart speakers market is expected to be a major driver for the conversational AI market. Smart speakers powered by voice AI assistants like Alexa and Google Assistant have massively grown in popularity. This has fueled the need for developing more advanced voice bots and chatbots for user engagement. Conversational AI bridges the gap between users and smart devices by enabling natural language interactions. Therefore, the proliferation of smart home devices is projected to propel the conversational AI market forward during the forecast period.

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