Global Conversational Ai Market
Market Size in USD Billion
CAGR :
% 
 Forecast Period |
2024 –2031 |
 Market Size (Base Year) |
USD 10.42 Billion |
 Market Size (Forecast Year) |
USD 58.37 Billion |
 CAGR |
% |
| Major Markets Players |
Global Conversational AI Market Segmentation, By Component (Platform and Services), Type (Intelligent Virtual Assistants, and Chatbots), Technology (Machine Learning and Deep Learning, Natural Language Processing, and Automated Speech Recognition), Deployment Model (0n-Premises and Cloud), Application (Customer Support, Personal Assistant, Branding and Advertisement, Customer Engagement and Retention, Onboarding and Employee Engagement, Data Privacy and Compliance, and Others), Organization Size (Large Enterprises and Small and Medium-Sized Enterprises), Business Function (Sales and Marketing, Finance, HR, Operations, and IT Service Management), Mode of Integration (Web-based, App-based, and Telephonic), End User (Banking, Financial Services, and Insurance, Retail and Ecommerce, Healthcare and Life Sciences, Travel and Hospitality, Telecom, Media and Entertainment, and Others) – Industry Trends and Forecast to 2031
Conversational AI Market Analysis
The conversational AI market is experiencing significant growth driven by advancements in natural language processing (NLP) and machine learning (ML) technologies. These innovations enhance the ability of chatbots and virtual assistants to understand and respond to human language more accurately and contextually. One of the latest methods includes the integration of transformer models, such as GPT and BERT, which improve the quality of conversations by enabling deeper contextual understanding.
These technologies are being widely adopted across various sectors, including customer service, healthcare, and e-commerce. For instance, businesses use conversational AI to automate customer interactions, leading to reduced operational costs and improved customer satisfaction. The demand for personalized experiences is fueling this growth, as consumers increasingly expect tailored responses from brands. Moreover, the expansion of voice-enabled devices and smart assistants is further driving market growth, as users prefer hands-free, natural interactions.
Conversational AI Market Size
The global conversational AI market size was valued at USD 10.42 billion in 2023 and is projected to reach USD 58.37 billion by 2031, with a CAGR of 24.04% during the forecast period of 2024 to 2031. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis.
Conversational AI Market Trends
“Increased Adoption of Voice Assistants”
One significant trend driving the growth of the conversational AI market is the increasing adoption of voice assistants across various devices. Voice-enabled devices, such as smart speakers and smartphones, have become integral to daily life, allowing users to interact seamlessly with technology. For instance, in January 2024, IBM Consulting introduced the IBM Consulting Advantage, a comprehensive AI services platform designed to enhance efficiency for consultants. This platform features unique methods and tools that leverage both IBM's technology and its strategic partners. Early adopters of this initiative reported productivity boosts of up to 50%, showcasing significant improvements in application design, development, and testing, thus reinforcing IBM's leadership in consulting solutions.
Report Scope and Conversational AI Market Segmentation
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Attributes |
Conversational AI Key Market Insights |
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Segments Covered |
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Countries Covered |
U.S., Canada and Mexico in North America, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe in Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in the Asia-Pacific (APAC), Saudi Arabia, U.A.E, South Africa, Egypt, Israel, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA), Brazil, Argentina and Rest of South America as part of South America |
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Key Market Players |
Google, LLC (U.S.), Microsoft (U.S.), IBM (U.S.), Amazon Web Services, Inc. (U.S.), Baidu (China), Oracle (U.S.), SAP SE (Germany), FIS (U.S.), Artificial Solutions (Sweden), Kore.ai, Inc. (U.S.), Conversica, Inc. (U.S.), Inbenta Holdings Inc. (U.S.), Creative Virtual Ltd. (U.S.), SoundHound AI, Inc. (U.S.), Avaamo (U.S.), Jio Haptik Technologies Limited (U.S.), Solvvy (U.S.), Cisco Systems, Inc. (U.S.), Kasisto (U.S.), Gupshup (U.S.) |
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Market Opportunities |
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Value Added Data Infosets |
In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis. |
Conversational AI Market Definition
Conversational AI refers to technologies that enable machines to engage in human-such as dialogue through text or voice interactions. It combines natural language processing (NLP), machine learning, and speech recognition to understand, interpret, and respond to user queries. Applications include conversational AI chatbots, virtual assistants, and customer service solutions that enhance user experience by providing instant support and information. Conversational AI systems learn from interactions, improving over time to deliver more accurate and context-aware responses. As a result, they are increasingly utilized across industries for tasks such as customer engagement, information retrieval, and automating routine processes, driving efficiency and satisfaction.
Conversational AI Market Dynamics
Drivers
- Rising Demand for Automation
The rising demand for automation significantly drives the conversational AI market as businesses strive to enhance efficiency and cut operational costs. Companies such as HDFC Bank in India have implemented AI-driven chatbots to handle routine customer queries, resulting in reduced response times and freeing up human agents for complex issues. This automation allows for 24/7 customer support, enabling organizations to cater to client needs at any time. Furthermore, sectors such as e-commerce leverage conversational AI to manage order inquiries and provide product recommendations, improving customer satisfaction while optimizing workforce resources. For instance, In April 2024, Sberbank, Russia's largest bank, launched GigaChat, its own conversational AI platform aimed at reducing reliance on foreign technology. This strategic move highlights Sberbank's ambition to diversify its offerings beyond conventional banking services. By introducing GigaChat, Sberbank positions itself to compete directly with leading AI models such as OpenAI's ChatGPT, enhancing its technological capabilities and fostering innovation within the Russian financial sector. Such implementations highlight how automation through conversational AI enhances operational efficiency and meets growing customer expectations.
- Increased Focus on Data Security
As businesses increasingly prioritize data privacy, the conversational AI market is witnessing significant growth. Solutions equipped with robust security features ensure that customer interactions remain confidential and compliant with regulations such as GDPR and CCPA. For instance, In October 2023, Invoca launched Signal AI Studio and enhanced its Signal artificial intelligence suite, providing businesses with tools to develop custom AI models that derive insights from phone conversations. This technology supports collaboration between contact centers and digital marketing teams, facilitating revenue growth for companies that rely on phone-based customer acquisition. By leveraging conversation intelligence, Invoca empowers businesses to optimize their communication strategies and improve overall performance.
Opportunities
- Advancements in Natural Language Processing (NLP)
The continuous evolution of Natural Language Processing (NLP) technologies is creating significant opportunities in the conversational AI market. Enhanced algorithms, such as transformer models and deep learning techniques, improve language understanding, enabling AI systems to grasp context and nuances in human communication. For instance, in January 2024, Google Cloud unveiled a new conversational commerce solution that integrates AI-driven virtual agents into retailers' websites and mobile applications. These agents engage customers through natural language interactions, offering personalized product recommendations tailored to individual preferences. This innovation aims to enhance the shopping experience, making it more interactive and responsive, thereby increasing customer satisfaction and potentially driving higher conversion rates for retailers.
- Rapid Digital Transformation
The rapid digital transformation across industries has created a significant opportunity for the conversational AI market. As businesses increasingly move online, the need for effective customer engagement solutions has skyrocketed. For instance, in September 2021, The Astro robot was announced as a unique device designed to assist users with various tasks, including home monitoring and facilitating communication with loved ones. This innovative technology represents a new frontier in personal robotics, aiming to enhance daily life through automation and support. By combining practicality with advanced AI, Astro seeks to become a helpful companion in everyday settings.
Restraints/Challenges
- High Development and Maintenance Costs
High development and maintenance costs are significant challenges in the conversational AI market. Developing sophisticated AI systems requires substantial initial investment in technology, infrastructure, and talent. In addition, ongoing expenses for updates, model training, and system maintenance can strain budgets, particularly for small to medium-sized enterprises (SMEs). These financial barriers often lead to hesitance in adopting conversational AI solutions, limiting market growth. As SMEs may lack the resources to invest in such technologies, they risk falling behind competitors who can afford advanced systems. Consequently, the high costs associated with development and maintenance create a significant hurdle for broader market adoption and innovation.
- User Acceptance and Trust Issues
User acceptance and trust issues significantly hinder the conversational AI market. Many users remain skeptical about engaging with AI technologies, often preferring human interaction for sensitive or complex tasks. This skepticism stems from concerns about accuracy, reliability, and the inability of AI to fully understand human emotions and nuances. In addition, negative experiences with chatbots or virtual assistants can reinforce distrust, leading to reluctance in using conversational AI solutions. As a result, organizations face challenges in promoting these technologies, and the overall market growth is stunted. Without significant improvements in user experience and trust-building measures, widespread acceptance of conversational AI will remain limited.
This market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.
Conversational AI Market Scope
The market is segmented on the basis of component, type, technology, deployment model, application, organization size, business function, mode of integration and end user. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.
Component
- Platform
- Services
- Training and Consulting
- Support and Maintenance
- Deployment and Integration
Type
- Intelligent Virtual Assistants
- Chatbots
Technology
- Machine Learning and Deep Learning
- Natural Language Processing
- Automated Speech Recognition
Deployment Model
- 0n-Premises
- Cloud
Application
- Customer Support
- Personal Assistant
- Branding and Advertisement
- Customer Engagement and Retention
- Onboarding and Employee Engagement
- Data Privacy and Compliance
- Others
Organization Size
- Large Enterprises
- Small and Medium-Sized Enterprises
Business Function
- Sales and Marketing
- Finance
- HR
- Operations
- IT Service Management
Mode of Integration
- Web-based
- App-based
- Telephonic
End User
- Banking Financial Services, and Insurance
- Retail and Ecommerce
- Healthcare and Life Sciences
- Travel and Hospitality
- Telecom
- Media and Entertainment
- Others
- Government
- Hospitality
- Manufacturing
Conversational AI Market Regional Analysis
The market is analyzed and market size insights and trends are provided by component, type, technology, deployment model, application, organization size, business function, mode of integration and end user as referenced above.
The countries covered in the market report are U.S., Canada, Mexico in North America, Germany, Sweden, Poland, Denmark, Italy, U.K., France, Spain, Netherland, Belgium, Switzerland, Turkey, Russia, Rest of Europe in Europe, Japan, China, India, South Korea, New Zealand, Vietnam, Australia, Singapore, Malaysia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in Asia-Pacific (APAC), Brazil, Argentina, Rest of South America as a part of South America, U.A.E, Saudi Arabia, Oman, Qatar, Kuwait, South Africa, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA).
North America is expected to dominate the conversational AI market due to the presence of major players in this region and the growing demand for enhancing customer support service to enhance customer satisfaction and improve retention rates. Prevalence of advanced infrastructure in combination with surging adoption rates of augmented and virtual reality technologies are some other important factors determining the dominance of this region.
Asia-Pacific is expected to witness significant growth during the forecast period due to the rising awareness of innovative customer support technologies and services in the developing economies such as China and India. Moreover, escalating IT infrastructure in the region coupled with rapidly growing healthcare consciousness among the people will yet again bolster the growth of the market in this region.
The country section of the report also provides individual market impacting factors and changes in market regulation that impact the current and future trends of the market. Data points such as down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.
Conversational AI Market Share
The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to market.
Conversational AI Market Leaders Operating in the Market Are:
- Google, LLC (U.S.)
- Microsoft (U.S.)
- IBM (U.S.)
- Amazon Web Services, Inc. (U.S.)
- Baidu (China)
- Oracle (U.S.)
- SAP SE (Germany)
- FIS (U.S.)
- Artificial Solutions (Sweden)
- Kore.ai, Inc. (U.S.)
- Conversica, Inc. (U.S.)
- Inbenta Holdings Inc. (U.S.)
- Creative Virtual Ltd. (U.S.)
- SoundHound AI, Inc. (U.S.)
- Avaamo (U.S.)
- Jio Haptik Technologies Limited (U.S.)
- Solvvy (U.S.)
- Cisco Systems, Inc. (U.S.)
- Kasisto (U.S.)
- Gupshup (U.S.)
Latest Developments in Conversational AI Market
- In August 2023, Inbenta acquired Horizn, a Toronto-based software company specializing in interactive product demonstrations. This acquisition will integrate Horizn’s innovative technology into Inbenta’s AI-driven customer experience platform. By enhancing its offerings with Horizn’s capabilities, Inbenta aims to provide clients with engaging, immersive experiences that facilitate product understanding and customer satisfaction, thus reinforcing its commitment to transforming digital interactions in the marketplace
- In August 2023, Kore.ai Inc. introduced an integration of its Experience Optimization Platform with Zoom Contact Center, providing users with an intelligent virtual assistant powered by the Kore.ai XO platform. This integration enables Zoom's customers to leverage advanced conversational AI, enhancing customer service efficiency and responsiveness. By automating interactions, it allows businesses to streamline operations and improve user engagement, ultimately driving better customer experiences and satisfaction
- In March 2023, Nuance Communications launched the Dragon Ambient eXperience Express, the first product to blend conversational and ambient AI with OpenAI’s latest model, GPT-4. This innovative system automates clinical documentation within workflows, building on the success of the Dragon Medical product line. By enhancing the existing Dragon Ambient solution, Nuance aims to improve healthcare documentation processes, enabling healthcare providers to focus more on patient care
- In April 2021, Microsoft announced its acquisition of Nuance Communications for $19.7 billion in an all-cash deal, aiming to strengthen its voice recognition and transcription technology capabilities. Nuance, a leader in AI-based solutions, brings extensive expertise that will enhance Microsoft's offerings in healthcare and other sectors. This acquisition reflects Microsoft's commitment to advancing AI technologies and integrating them into its product ecosystem to better serve its customers
- In March 2021, Google Cloud announced the general availability of Vertex AI, a managed machine learning platform designed to streamline the development and maintenance of AI models. Vertex AI provides businesses with robust tools and infrastructure, enabling faster deployment of machine learning applications. By facilitating easier access to advanced AI capabilities, Google Cloud aims to empower organizations to leverage AI technologies more effectively and efficiently
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Research Methodology
Data collection and base year analysis are done using data collection modules with large sample sizes. The stage includes obtaining market information or related data through various sources and strategies. It includes examining and planning all the data acquired from the past in advance. It likewise envelops the examination of information inconsistencies seen across different information sources. The market data is analysed and estimated using market statistical and coherent models. Also, market share analysis and key trend analysis are the major success factors in the market report. To know more, please request an analyst call or drop down your inquiry.
The key research methodology used by DBMR research team is data triangulation which involves data mining, analysis of the impact of data variables on the market and primary (industry expert) validation. Data models include Vendor Positioning Grid, Market Time Line Analysis, Market Overview and Guide, Company Positioning Grid, Patent Analysis, Pricing Analysis, Company Market Share Analysis, Standards of Measurement, Global versus Regional and Vendor Share Analysis. To know more about the research methodology, drop in an inquiry to speak to our industry experts.
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