What is Conversational AI Market? [2024 Growth & Trends]

Do you know that the conversational AI market is one of the quickly growing industries in the world? The reason behind this massive growth and popularity is the introduction of modern AI tools and technologies.

Bard, ChatGPT, and Bing AI are some of the most prominent names that are the driving force of the AI industry, especially conversational AI market, nowadays.

Different types of complex AI systems, chatbots, voice assistants, and many tools form the conversational AI market. The primary goal of such systems is to operate as per a massive dataset and provide responses similar to any human conversations.

Keep reading this article to learn about the different trends and growth of the conversational AI industry.

Part 1: Growth of the Conversational AI Market

The conversational AI market is rapidly growing. Statistics show that its worth was USD 7.9 billion in 2022. By the end of 2023, this number is expected to reach the massive amount of USD 10.7 billion, as per expert researchers.

Moreover, future analysis of the market shows that it will keep enjoying steady growth till 2028 with a growth rate of 22.60%.

A number of factors are driving the growth of the conversational AI market and the overall AI industry.

More and more companies are investing in sophisticated AI systems to enhance their productivity and efficiency. Even smaller companies around the world are adopting AI solutions to enhance their business procedures and enjoy more profits.

It is also important to note that the adoption of AI-based technologies, such as ChatGPT, at a personal level is also increasing. When these trends are incorporated into the statistics, it becomes quite evident that the conversational AI market will keep growing.

Part 2: Factors Affecting the Conversational AI Market

Now that you are familiar with the basics of the AI technologies and the overall trend of the conversational AI market, let’s dive into the detailed factors that are affecting this industry and driving its growth.

Focus on Better Service

It should go without saying that the profitability of a business is highly dependent on good its customer service is.

The role of AI in customer service is rapidly growing. More and more businesses are realizing that they should be using modern technologies, such as AI, to enhance their customer services. As a result, the conversational AI market is growing because more organizations are using AI conversational bots to improve their customer services.

Rising Popularity of Large Language Models

Without diving into the technicalities of the large language models (LLMs), you should know that these are the driving force of the AI industry nowadays.

ChatGPT is the most popular example of LLM. Such tools are capable of analyzing the prompts written in human language and provide similar responses. With more advancements, these tools are becoming capable of handling complex queries as well.

Content generation, translation, text summaries, and image generation are some of the many features of AI conversational tools nowadays. Overall, these tools can provide both professional and personal benefits.

Greater Usage of Voice Assistants

The trend of using voice assistants is another factor why the conversational AI market is growing at a steady rate. Voice assistants use AI algorithms to understand and analyze human language so they can respond accordingly.

Siri and Alexa are two of the very popular voice assistants used in both personal and professional environments.

Greater Adoption of Cloud Systems

Modern cloud technologies and AI tools are closely interlinked. The analysis of the AI industry shows that its significant portion is dedicated towards cloud technologies. Many industries, like the healthcare and retail sectors, use such technologies to enhance their working procedures.

Part 3: Conversational AI Market Segmentation

There is no doubt that the conversational AI market has applications in every other industry. However, it is important to analyze the key segments of the conversational AI market to fully understand it.

Components of Conversational AI Market

The conversational AI market can be segmented into two major categories on the basis of its major components:

1. Platform: It includes tools and IT infrastructure needed to develop conversational AI systems.
2. Services: It includes the services required to implement conversational AI solutions, such as support, maintenance, and training.

Leading Technologies of Conversational AI Market

Some of the leading technologies involved in the conversational AI market are:

1. Natural language processing and deep learning that uses neural networks to understand and respond in natural language.
2. Automated speech recognition to convert voice into written form.
3. Machine learning to train the bots on a massive dataset.

Two Deployment Modes of Conversational AI Solutions

Conversational AI solutions can be deployed in two major ways:

1. Cloud to make sure an organization can access it from anywhere in the world.
2. On-premise to ensure an organization has internal infrastructure with maximum security.

End-Users of Conversational AI Systems

The end-users of conversational AI systems can be in various industries, such as banking, retail chains, ecommerce platforms, healthcare, tourism, and many others.

Key Regions of the Conversational AI Market

The massive popularity of conversational AI systems mean that industries around the world are using such technologies and contributing towards the overall growth of the industry.

Nevertheless, North America, specifically, has the largest share of the market. This share is expected to keep increasing because most of the leading industry players are located in this region.

Part 4: What are the top companies in the Conversational AI Market?

Most of the well-known tech giants are also the leading names in the conversational AI market, such as:

Google

Google is known for being a pioneer in most of the IT fields. It has several different products and services in the conversational AI market as well. Some of these popular products and services are Google Assistant, Text-to-Speech, and DialogFlow.

Microsoft

Microsoft is quickly becoming a leading name in the AI industry, especially with the introduction of its Bing AI Chat, powered by OpenAI’s GPT 4. It also has several other products and service, such as Azure Bot Service and Cortana.

Amazon

Amazon is one of the biggest names in the conversational AI market due to Alexa. It has many other AI-powered tools like Amazon Comprehend and Amazon Transcribe.

Oracle

Oracle is an emerging name in the conversational AI market because of its Oracle Digital Assistant Platform and Oracle Intelligent Bots Service.

Other than these top companies, there are many other players in the conversational AI industry, such as Baidu, Conversica, IBM, and many others. Almost all of these corporations are focused on constant product portfolio expansion and collaborations with other organizations, such as Microsoft and OpenAI, to build powerful AI systems.

Part 5: Highlights of the Conversational AI Market

Following are the key findings and highlights of the conversational AI market:

Conclusion

The detailed analysis and discussion throughout this article shows that the conversational AI market is rapidly growing due to mass adoption by organizations around the world.

With more and more players entering the industry, this growth trend is expected to continue in the next decade. All of the future projections of the AI market also point towards exponential growth.

Considering all of these factors, everyone should explore the modern AI solutions and enjoy their numerous benefits.