AI chatbots are software applications that use natural language processing and machine learning to simulate human conversations with users. AI chatbots can provide various benefits such as improving customer service, enhancing user experience, increasing efficiency, reducing costs, and generating insights.
The global AI chatbot market is expected to grow at a compound annual growth rate (CAGR) of 23.3% from US$5.4 billion in 2023 to US$15.5 billion by 2028, according to a report by MarketsandMarkets. The report attributes this growth to factors such as advancements in technology, rising customer demand for self-service operations, growing need for 24/7 customer support, increasing focus on customer engagement through various channels, and rising usage of generative models in chatbots.
The report also segments the AI chatbot market based on offering, type, business function, bot communication, channel integration, vertical, and region. The solutions segment is expected to hold the largest market share during the forecast period due to the availability of various platforms and tools for developing and deploying chatbots. The mobile app segment is expected to hold the largest market share during the forecast period due to the popularity of messaging apps such as WhatsApp, Facebook Messenger, and Telegram for interacting with businesses and organizations.
The contact centers segment is expected to hold the largest market share during the forecast period due to the value that chatbots can add to contact centers by handling routine customer inquiries and freeing up human agents to deal with more complex issues. The retail & e-commerce segment is expected to hold the largest market share during the forecast period due to the high adoption of chatbots for providing product information, recommendations, reviews, feedback, and order tracking.
The report also identifies some of the key players in the AI chatbot market such as Google (US), Microsoft (US), IBM (US), AWS (US), Baidu (China), Oracle (US), SAP (Germany), OpenAI (US), Salesforce (US), Meta (US), Artificial Solutions (Sweden), ServiceNow (US), [24]7.ai (US), Kore.ai (US), Conversica (US) and many more. These players are focusing on developing innovative solutions that can deliver human-like conversational experiences using natural language generation, sentiment analysis, computer vision, speech recognition, etc.
The report also highlights some of the challenges and opportunities that are likely to shape the future of the AI chatbot market such as ensuring quality assurance, data privacy, security, scalability, interoperability, integration, customization, etc., as well as exploring new use cases such as healthcare & life sciences, education & research, social media & e-commerce platforms, etc.
The report concludes that there is a high demand for AI-based chatbots across various industries and sectors due to their ability to provide personalized, engaging, convenient, and cost-effective solutions for customers. The report also suggests that there is a need for more research and development in this domain to overcome some of the limitations and challenges that are currently faced by AI chatbot developers.
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