Conversational AI refers to the technology that enables computers to carry out conversations. Conversational AI combines Natural Language Processing (NLP), speech-based technology, and machine learning (ML) into a single platform, in order to build intelligent conversational interfaces. Today, conversational AI is commonly known as chatbots. It includes text-only chatbots, as well as voice bots and voice + text assistants. So, messaging apps, speech-based assistants, and chatbots – all come under the conversational AI category.
For businesses, conversational AI can transform the way customer support is provided. With chatbots and voice assistants, businesses can provide seamless customer support, which in turn, goes a long way in enhancing customer engagement and retention. All these can eventually make a huge difference in business operations and profitability.
The global conversational AI market was valued at USD 4.2 billion in 2019 and is projected to reach USD 15.7 billion by 2024. The market is estimated to grow at an impressive CAGR of 30.2% between 2019 and 2024, and this can be attributed to reduced cost of chatbot development, growing demand for AI-powered customer support services, and increasing omni-channel deployment. Further, growing customer engagement through social media platforms is likely to create opportunities for the conversational AI market.
Among various conversational AI applications, the personal assistant application is predicted to grow at a high CAGR in the coming years. Conversational AI vendors are concentrating on developing robust cloud-based solutions, as such solutions can give conversation insights in real time. Moreover, cloud-based solutions are easy to use, cost-effective, and scalable, and therefore, the demand for could-based conversational AI solutions is likely to grow rapidly in the near future.
North America is dominating the global conversational AI market and is likely to continue its dominance in the coming years too. However, the Asia-Pacific region is expected to register the highest growth during 2019 to 2024, mainly due to increasing investments undertaken by public and private sectors for improving their AI and ML technologies. This, in turn, will create an increasing demand for conversational AI solutions.
The major players in the global conversational AI market are Alphabet Inc., Microsoft Corporation, IBM Corporation, Oracle Corporation, Baidu, Inc., Amazon Web Services, Inc., Nuance Communications, Inc., and Rasa Technologies GmbH (RASA), among others. Google already launched an enterprise edition of its Dialogflow platform in April 2018, to help companies build and run their own bots without requiring any AI expertise.
On the other hand, in November 2018, Microsoft signed an agreement to acquire XOXCO, a solution provider for bot development and conversational AI. With this acquisition, Microsoft is planning to strengthen its initiatives to offer accessible software tools to developers, so that they can create and deploy conversational interfaces across different platforms.
In the coming days, more such new launches, mergers & acquisitions, and collaborations are likely to take place, which will further accelerate the growth of the global conversational AI market.
In March 2018, AWS collaborated with Haptik, an AI-based chabot platform provider, to offer cutting-edge chatbot solutions to the customers in India. In line with this collaboration, Haptik would leverage AWS’ AI infrastructure to provide conversational bots for the major application areas in the conversational AI market. Haptik is also a part of the global Amazon Partner Network program. The program helps companies build better products and take advantage of the business benefits offered by AWS.