Conversational AI Market - By Component (Solutions, Services), By Type (Chatbots, Intelligent Virtual Assistant), By Deployment Mode (Cloud, On-premises), By Technology, By End User, By Application & Forecast, 2024 - 2032
Published Date: April - 2025 | Publisher: MIR | No of Pages: 240 | Industry: Media and IT | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationConversational AI Market Size
Imagine you could talk to a computer like you talk to a person. That's the magic of Conversational AI (CAI)! Its market size was a staggering $9.9 billion in 2023. And it will only continue to grow. Specialists forecast that CAI will expand by more than 21.5% annually until 2032. That's because it makes communicating with computers as simple and pleasant as can be. CAI can talk to you as a friend, providing you with customized advice and responding to your questions in real-time. It can even learn from your habits to make it even more customized for you. When companies implement CAI, they can engage with their customers on a more personal level. It's as if you have a personal assistant for each customer, willing to make them feel heard and understood. And here's the best partSatisfied customers are returning customers. They're more likely to remain with a business that they feel appreciates them. That means CAI can not only enhance customer service, but also increase sales. So, if you're not already making use of CAI, you're missing an opportunity to make your business successful.
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The escalating customer expectations for swift, personalized interactions have catalyzed the rapid expansion of conversational AI solutions. By enabling businesses to provide instantaneous & tailored responses and automate repetitive tasks, these technologies have become cost-efficient solutions. Moreover, their ability to operate round the clock, seamlessly integrate with the existing systems, and offer scalable support have further propelled the adoption of conversational AI solutions.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Conversational AI Market Size in 2023 | USD 9.9 Billion |
| Forecast Period | 2024 to 2032 |
| Forecast Period 2024 to 2032 CAGR | 21.9% |
| 2032 Value Projection | USD 57.2 Billion |
| Historical Data for | 2018 – 2023 |
| No. of Pages | 300 |
| Tables, Charts & Figures | 471 |
| Segments covered | Component, Type, Deployment Mode, Technology, End User, Application |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
The issue of data security and privacy is one of the major challenges facing the development of conversational AI. Since such systems deal with confidential user data, there is a high need to ensure a strong security barrier against data breaches and unauthorized use. Finding a balance between delivering custom experiences and safeguarding user data is difficult, especially with changing data protection guidelines. Making sure that conversational AI platforms always live up to these high levels of security and privacy will continue to be a major challenge for companies & developers in the sector.
COVID-19 Impact
The COVID-19 pandemic had several positive effects on the conversational AI market. During lockdowns and social distancing, companies relied on AI-powered chatbots and virtual assistants to keep customers engaged & deliver vital services remotely. The surge in demand for online engagement and self-service solutions expedited the deployment of conversational AI across industries, underscoring its capability to provide contactless and efficient solutions. The trend is set to persist as companies identify the benefits of digital communication and automation.
Conversational AI Market Trends
Hello! You're familiar with how you search the web using search engines like Google, right? Well, they're improving further! These search engines now employ what's known as "conversational AI." It's similar to having a pal assist you with finding what you're looking for. You type in your query like you're used to doing, but now the search engine will chat with you back and forth. That makes it lots easier and faster to receive answers you need. For instance, if you search, "What is the best chocolate chip cookie recipe?" the search engine will provide you with a list of recipes and even respond to follow-up queries such as, "How long do I bake them?" Many people are already using these conversation search engines, and they're making a big impact. Google just announced they're going to include conversational AI in their standard search engine. Which is to say that you'll be able to talk to Google the same way you would to a friend. As more and more people begin using conversational search engines, they're going to become even more adept at helping us locate what we're looking for. It's like the future of searching is all about talking to computers!
Conversational AI Market Analysis
Find out more about the major segments driving this market
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For the utilization of generative AI, companies have two broad choiceson their own servers or cloud-based. As of 2023, companies largely chose the on-premise model with a market share of over 60%. In order to facilitate companies with generative AI for ease of utilization, extensive collaboration has taken place in developing solutions on their own servers. This is helping the conversational AI industry grow because it makes it easier for businesses to use advanced AI models. By giving businesses better access to generative AI features like better customer service and better insights into the market, conversational AI solutions are becoming more popular. For instance, Dell Technologies and NVIDIA began collaborating in May 2023 to simplify the creation and deployment of generative AI models within on-premise environments. This will assist companies in enhancing various aspects of their operations, such as customer support and enterprise-level searches.
Discover more about the most important segments driving this market
On the basis of end-user, the market is divided into BFSI, healthcare, IT & telecom, retail & E-commerce, education, and media & entertainment, automotive and others. Retail & e-commerce segment accounted for 22% market share in 2023 and is anticipated to increase heavily till 2032. Retail & E-commerce sector is driving the overall market by implementing these technologies to improve customer experiences. Conversational AI products, like chatbots & virtual assistants, enable one-to-one customer care, product suggestions, and hassle-free transaction processes. With more consumers shopping online, companies are embracing conversational AI to connect with customers, enhance conversion rates, and optimize operations. This increasing adoption in the retail and E-commerce industry highlights the key role conversational AI is playing in transforming the future of customer interaction and driving market growth.
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North America dominated the world market with a share of more than 32% in 2023. Technological innovations and the rise of conversational AI startups in the U.S. are largely fueling growth in the North America conversational AI market. These startups are bringing new solutions that leverage the most recent AI advancements. With an emphasis on improving customer engagement and automation, they are also garnering huge investments. This surge of innovation and investment is making North America the conversational AI hub, fostering market growth and providing businesses with advanced tools to enhance customer interactions & operational efficiency.
Conversational AI Market Share
Some of the major players operating in the conversational AI industry are
- Amazon Web Services Inc.
- Google LLC
- IBM Corporation
- Jio Haptik Technologies Limited
- Conversica Inc.
- Microsoft Corporation
- Oracle Corporation
- FIS Global
- SAP SE
These companies focus on developing conversational AI systems that can handle multiple languages and dialects, allowing providers to enter new markets and serve a more diverse customer base.
Conversational AI Industry News
- In August 2023, Inbenta acquired Horizn, a software company based in Toronto that specializes in providing seamlessly embeddable interactive product demonstrations. This acquisition involves the incorporation of Horizn's technology into Inbenta's Artificial Intelligence (AI) customer experience platform.
- In August 2023, Kore.ai, a prominent provider of enterprise conversational & generative AI solutions, unveiled the integration of its Experience Optimization Platform with Zoom Contact Center. This integration offers Zoom Contact Center customers the capability to utilize an intelligent virtual assistant driven by the Kore.ai XO platform.
The conversational AI market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments
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Market, By Component
- Solutions
- Services
- Support & Maintenance
- System Integration & Implementation
- Training & Consulting
Market, By Type
- Chatbots
- Intelligent Virtual Assistant (IVA)
Market, By Deployment Mode
- Cloud
- On-premises
Market, By Technology
- Natural Language Processing (NLP)
- Machine Learning & Deep Learning
- Automatic Speech Recognition
Market, By End User
- BFSI
- Healthcare
- IT & Telecom
- Retail & E-commerce
- Education
- Media & Entertainment
- Automotive
- Others
Market, By Application
- Customer Support
- Personal Assistant
- Branding and Advertisement
- Customer Engagement & Retention
- Others
The above information is provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Nordics
- Asia Pacific
- China
- Japan
- India
- South Korea
- ANZ
- Southeast Asia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- Saudi Arabia
- UAE
- South Africa
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