Conversational AI Trends and Forecast
The future of the global conversational AI market looks promising with opportunities in the banking, financial services & insurance, retail & ecommerce, healthcare & life sciences, travel & hospitality, IT & ITES, media & entertainment, telecom, and automobile & transportation markets. The global conversational AI market is expected to reach an estimated $37.3 billion by 2030 with a CAGR of 20.2% from 2024 to 2030. The major drivers for this market are increasing customer engagement through social media platforms, growing adoption of AI-based Gartner chatbots solutions, and reduced cost of development and deployment of conversational AI solutions.
• Lucintel forecasts that, within the business function category, human resource is expected to witness the highest growth over the forecast period due to its application in retrieving information from websites directly related to potential employees, which helps with the screening process.
• Within the end use category, retail & ecommerce will remain the largest segment due to AIÄX%$%Xs ability to increase consumer interaction, optimize processes, and enhance overall purchasing experiences.
• In terms of regions, North America will remain the largest region over the forecast period due to the rising use of voice-based search and existence of many key players in this region.
A more than 150-page report is developed to help in your business decisions.
Emerging Trends in the Conversational AI Market
The conversational AI market is evolving rapidly, with several key trends shaping its future.
• Integration with IoT Devices: Conversational AI is increasingly being integrated with Internet of Things (IoT) devices, allowing users to control smart home appliances and other connected devices through voice commands.
• Advancements in Natural Language Processing (NLP): Continuous improvements in NLP are making AI interactions more human-like, with better understanding and generation of natural language.
• Multi-Language and Regional Support: AI solutions are expanding their capabilities to support multiple languages and regional dialects, catering to a global audience.
• AI in Customer Experience: Businesses are leveraging conversational AI to enhance customer service, providing quick and efficient responses through chatbots and virtual assistants.
• Ethical and Transparent AI: There is a growing focus on developing ethical AI systems that ensure transparency, fairness, and accountability in AI interactions.
• AI for Personalization: Conversational AI is being used to deliver personalized experiences based on user preferences and behavior, improving engagement and satisfaction.
Emerging trends in conversational AI reflect a growing emphasis on integration, advanced language capabilities, and personalization, shaping the future of user interactions with technology.
Recent Developments in the Conversational AI Market
Recent developments in conversational AI are transforming various industries through innovative applications and technological advancements.
• Increased Investment and M&A Activity: There has been a surge in investment and mergers and acquisitions (M&A) in the conversational AI sector, with major tech companies acquiring startups to enhance their AI capabilities.
• Enhanced AI Capabilities: Advances in machine learning and NLP have significantly improved the accuracy and contextual understanding of conversational AI systems.
• Expansion into New Markets: Conversational AI solutions are expanding into new sectors such as healthcare, finance, and education, offering tailored solutions for each industry.
• Adoption of AI Ethics Guidelines: Companies are adopting ethical guidelines and best practices to ensure responsible use of conversational AI, addressing concerns about bias and privacy.
• Development of Multi-Modal Interfaces: New conversational AI systems are incorporating multi-modal interfaces, combining voice, text, and visual elements for more interactive user experiences.
• Integration with Cloud Services: Many conversational AI solutions are being integrated with cloud platforms, enhancing scalability and accessibility for businesses of all sizes.
Recent developments in conversational AI highlight a trend towards increased investment, advanced technological capabilities, and broader adoption across various industries.
Strategic Growth Opportunities for Conversational AI Market
The conversational AI market presents strategic growth opportunities in several key applications.
• Customer Service: Leveraging AI chatbots and virtual assistants to handle customer inquiries and support, improving efficiency and customer satisfaction.
• Healthcare: Utilizing conversational AI for virtual health consultations, appointment scheduling, and patient monitoring, enhancing healthcare delivery and accessibility.
• E-commerce: Implementing AI-driven recommendations and support to personalize shopping experiences and streamline customer interactions.
• Education: Integrating AI into educational platforms for personalized tutoring, language learning, and student support, improving educational outcomes.
• Finance: Deploying conversational AI for financial advising, customer support, and fraud detection, enhancing service quality and security.
• Travel and Hospitality: Using AI to provide travel recommendations, booking assistance, and customer support, enhancing the travel experience for users.
The conversational AI market offers significant growth opportunities across various applications, driven by the increasing demand for personalized, efficient, and scalable solutions.
Conversational AI Market Driver and Challenges
The conversational AI market is driven by several key factors and faces various challenges.
The factors responsible for driving the conversational ai market include:
• Technological Advancements: Continuous improvements in AI technologies, such as NLP and machine learning, are enhancing the capabilities and adoption of conversational AI.
• Increased Demand for Automation: Businesses are seeking automation solutions to improve efficiency and reduce operational costs, driving the adoption of conversational AI.
• Growth in Digital Transformation: The ongoing digital transformation across industries is boosting the demand for AI-powered solutions to enhance customer interactions and services.
• Improved User Experience: Advances in AI are leading to more natural and intuitive user interactions, increasing the appeal of conversational AI solutions.
• Expansion of IoT Devices: The proliferation of IoT devices is creating new opportunities for conversational AI to control and interact with connected technologies.
Challenges in the conversational ai market are:
• Privacy and Security Concerns: Ensuring the security and privacy of user data in conversational AI systems remains a significant challenge.
• Integration Complexity: Integrating conversational AI with existing systems and processes can be complex and require significant resources.
• Ethical and Bias Issues: Addressing ethical concerns and biases in AI interactions is crucial for building trust and ensuring fair use.
• High Implementation Costs: The cost of developing and deploying advanced conversational AI solutions can be a barrier for some organizations.
• Regulatory Compliance: Navigating regulatory requirements and standards for AI technologies can be challenging for businesses.
The conversational AI market is driven by technological advancements and growing demand for automation but faces challenges related to privacy, integration, and ethical considerations.
List of Conversational AI Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. With these strategies conversational AI companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the conversational AI companies profiled in this report include-
• IBM
• Microsoft
• Google
• AWS
• Artificial Solutions
• Baidu
• SAP
• Oracle
• OpenAI
• LivePerson
Conversational AI by Segment
The study includes a forecast for the global conversational AI by business function, channel, offering, end use, and region.
Conversational AI Market by Business Function [Analysis by Value from 2018 to 2030]:
• Information Technology Service Management
• Human Resource
• Sales & Marketing
• Operations & Supply Chain
• Finance & Accounting
Conversational AI Market by Channel [Analysis by Value from 2018 to 2030]:
• Emails & Websites
• Mobile Apps
• Telephones
• Messaging Apps
Conversational AI Market by Offering [Analysis by Value from 2018 to 2030]:
• Solutions
• Services
Conversational AI Market by End Use [Analysis by Value from 2018 to 2030]:
• Banking, Financial Services & Insurance
• Retail & Ecommerce
• Healthcare & Life Sciences
• Travel & Hospitality
• IT & ITES
• Media & Entertainment
• Automobile & Transportation
• Others
Conversational AI Market by Region [Shipment Analysis by Value from 2018 to 2030]:
• North America
• Europe
• Asia Pacific
• The Rest of the World
Country Wise Outlook for the Conversational AI Market
Major players in the market are expanding their operations and forming strategic partnerships to strengthen their positions. Below image highlights recent developments by major conversational AI producers in key regions: the USA, China, India, Germany and Japan.
• United States: In the U.S., the conversational AI market has seen significant advancements driven by tech giants like Google, Microsoft, and Amazon. These companies are integrating AI chatbots and virtual assistants into a wide array of applications, from customer service to healthcare. For instance, GoogleÄX%$%Xs Bard and MicrosoftÄX%$%Xs Copilot are enhancing user interactions with more natural and contextual responses. Additionally, American companies are investing heavily in AI startups specializing in industry-specific solutions, further accelerating innovation. The U.S. also benefits from a robust ecosystem of AI research and development, supported by leading universities and tech hubs.
• China: China has rapidly advanced in conversational AI with significant contributions from tech giants like Baidu, Alibaba, and Tencent. These companies are deploying AI-driven chatbots across e-commerce, customer service, and financial sectors. For example, BaiduÄX%$%Xs DuerOS is widely used in smart devices and virtual assistants, enhancing user experience with sophisticated natural language processing capabilities. ChinaÄX%$%Xs government is also supporting AI development through national strategies and funding initiatives, aiming to become a global leader in AI technology. The countryÄX%$%Xs focus on integrating AI with various industries has accelerated market growth and adoption.
• India: In India, the conversational AI market is growing due to the increasing adoption of AI technologies in various sectors, including customer service, healthcare, and education. Companies like Haptik and Vernacular.ai are leading the way with AI-powered chatbots that support multiple regional languages, catering to IndiaÄX%$%Xs diverse population. The Indian governmentÄX%$%Xs push towards digital transformation and smart city initiatives is further driving the adoption of conversational AI. Additionally, the rise of tech startups and increased venture capital investment are contributing to the rapid development and deployment of AI solutions across the country.
• United Kingdom: The UK has seen notable advancements in conversational AI, particularly in sectors such as finance and healthcare. Companies like Babylon Health are leveraging AI to provide virtual healthcare consultations, while financial institutions are using chatbots to enhance customer service. The UKÄX%$%Xs regulatory environment and focus on ethical AI practices are shaping the development of conversational AI technologies. Additionally, the presence of numerous AI research institutions and tech incubators in cities like London and Cambridge is fostering innovation and collaboration in the AI space. The UKÄX%$%Xs commitment to AI research is expected to drive future growth in the sector.
• Japan: JapanÄX%$%Xs conversational AI market is evolving with contributions from leading technology companies like Sony, NEC, and SoftBank. These companies are integrating AI into robotics, smart home devices, and customer service applications. JapanÄX%$%Xs emphasis on robotics and automation has led to the development of advanced conversational agents that interact seamlessly with users. The countryÄX%$%Xs aging population is also driving demand for AI-powered solutions in healthcare and elderly care. Government initiatives and collaborations between academia and industry are further accelerating the adoption and development of conversational AI technologies in Japan.
Features of the Global Conversational AI Market
Market Size Estimates: Conversational AI market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends (2018 to 2023) and forecast (2024 to 2030) by various segments and regions.
Segmentation Analysis: Conversational AI market size by various segments, such as by business function, channel, offering, end use, and region in terms of value ($B).
Regional Analysis: Conversational AI market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
Growth Opportunities: Analysis of growth opportunities in different business functions, channels, offerings, end uses, and regions for the conversational AI market.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the conversational AI market.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
If you are looking to expand your business in this or adjacent markets, then contact us. We have done hundreds of strategic consulting projects in market entry, opportunity screening, due diligence, supply chain analysis, M & A, and more.
FAQ
Q1. What is the conversational AI market size?
Answer: The global conversational AI market is expected to reach an estimated $37.3 billion by 2030.
Q2. What is the growth forecast for conversational AI market?
Answer: The global conversational AI market is expected to grow with a CAGR of 20.2% from 2024 to 2030.
Q3. What are the major drivers influencing the growth of the conversational AI market?
Answer: The major drivers for this market are increasing customer engagement through social media platforms, growing adoption of AI-based Gartner chatbots solutions, and reduced cost of development and deployment of conversational AI solutions.
Q4. What are the major segments for conversational AI market?
Answer: The future of the conversational AI market looks promising with opportunities in the banking, financial services & insurance, retail & ecommerce, healthcare & life sciences, travel & hospitality, IT & ITES, media & entertainment, telecom, and automobile & transportation markets.
Q5. Who are the key conversational AI market companies?
Answer: Some of the key conversational AI companies are as follows:
• IBM
• Microsoft
• Google
• AWS
• Artificial Solutions
• Baidu
• SAP
• Oracle
• OpenAI
• LivePerson
Q6. Which conversational AI market segment will be the largest in future?
Answer: Lucintel forecasts that human resource is expected to witness the highest growth over the forecast period due to its application in retrieving information from websites directly related to potential employees, which helps with the screening process.
Q7. In conversational AI market, which region is expected to be the largest in next 5 years?
Answer: North America will remain the largest region over the forecast period due to the rising use of voice-based search and existence of many key players in this region.
Q.8 Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the conversational AI market by business function (information technology service management, human resource, sales & marketing, operations & supply chain, and finance & accounting), channel (emails & websites, mobile apps, telephones, and messaging apps), offering (solutions and services), end use (banking, financial services & insurance, retail & ecommerce, healthcare & life sciences, travel & hospitality, IT & ITES, media & entertainment, automobile & transportation, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Conversational Ai Market, Conversational Ai Market Size, Conversational Ai Market Growth, Conversational Ai Market Analysis, Conversational Ai Market Report, Conversational Ai Market Share, Conversational Ai Market Trends, Conversational Ai Market Forecast, Conversational Ai Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.