Conversational AI Market Size, Share, Opportunities, And Trends By Component (Solutions, Managed Services, Professional Services (Training & Consulting, System Integration & Implementation, Support & Maintenance)), By Deployment (On-premises, Cloud), By Type (Chatbots, Intelligent Virtual Assistant (IVA)), By Technology (Natural Language Processing (NLP), ML And Deep Learning, Automatic Speech Recognition (ASR)), By End-user (BFSI, Media & Entertainment, Retail, IT & Telecommunication, Healthcare, Automotive, Travel And Tourism, Food & Beverages, Others), And By Geography - Forecasts From 2024 To 2029

Conversational AI Market Size:

The conversational AI market is estimated to grow at a CAGR of 26.10% during the forecast period.

Due to the increasing need for chatbots, the declining cost of developing them, the availability of customer support services that use AI technology, and the ability to deploy them across multiple channels, among other reasons, this market’s growth is being further accelerated. Speech and messaging applications based on AI technology are replacing existing web and mobile applications at a rapid rate, hence the assumption that they will be an alternate medium of interaction. An increasing number of hybrid conversational models that embrace both discriminative and generative methods are being advanced. These models might also be more effective and efficient in accomplishing certain tasks such as natural language processing, translating languages, and even classifying images.

Moreover, several initiatives are underway to ensure the efficiency and effectiveness of these technologies in addressing related business use cases. The demand for generative AI companies has grown as AIs have been able to casually respond to queries like a person would. While this is useful, it can also completely change people’s relationship with technology by enabling more customized and human-sounding interpersonal conversations. The public sector is also looking to adapt to conversational AI platforms as government agencies worldwide are embracing contemporary technology effectively to enhance citizens’ engagement.

Conversational AI Market Growth Drivers:

• Increased Demand for Customer Support Automation: The increasing need for customer support services is fueling the conversational AI market growth. As the tech kept developing, more companies started employing sophisticated conversational AI to enhance service to their customers. Nowadays, businesses have adopted the use of digital bots within their systems to enhance customer experience instead of fixing an email or sending an SMS regarding customer relations. Customers expect intelligent chatbots, which reach out to them with speech recognition features, to engage in sultry conversation and show understanding while selling their services.

They use this information to help the company know customers' concerns, wants, and buying habits to provide foresight and more individualized services. For instance, AI-based chatbots are enabled within the business to reduce the manual efforts needed for typical placing an order, checking balances, responding to general inquiries, technical assistance, and other customer support operations. As a result, a company can enhance its productivity level thanks to automation but with fewer workforce hires, pushing the industry's growth.

• Human-Like Interactions with Generative AI: Growing human-like interactions are contributing to the conversational AI market expansion. The worldwide adoption of generative AI applications brings good news to conversational AI providers with progress-oriented growth plans. These applications will help these providers to offer more efficient, individualized, and human-like interactions. Particularly, generative AI technologies like Generative Pre-Trained Transformers (GPT) models have made tremendous progress in understanding and generating human language. These models have enhanced conversational AI so that users can have more animated and contextual conversations. For instance, the GPT-3 model by OpenAI, which boasts 175 billion parameters, has generated human-like text on almost every conceivable topic and even within multiple contexts.

• Emotional Intelligence in Chatbots: Increased use of emotional intelligence is also contributing to conversational AI market growth. Creating chatbots with emotional intelligence is one significant development in conversational AI. These chatbots can identify human emotions and react with greater empathy. Chatbots with emotional intelligence can comprehend complex human emotions like discontent, rage, and frustration to effectively manage difficult customer interactions and modify their responses accordingly.

Therefore, user satisfaction must be raised for these technologies to be successfully integrated. Researchers have incorporated emotional intelligence into chatbots using natural language processing (NLP) and artificial intelligence (AI) components. In the recent past, however, chatbots have shifted from providing information services to offering emotional and social assistance in personal space and health care practice.

Conversational AI Market Restraints:

• Rising Data privacy concerns and lack of awareness

Businesses and consumers should be aware of conversational AI's potential and advantages. However, owing to a lack of knowledge, most people hesitate to use such technologies. Most users are concerned about privacy since they do not understand how these conversational AIs process or store their information. Furthermore, because of their lack of appreciation of this technology, organizations may overlook opportunities to improve their customers’ experiences as well as their levels of efficiency.

Organizations are concerned that as this is a technology, its use will replace jobs that require human interaction with customers. Even if there is some degree of customer interaction, others believe it is unnecessary as implementing it is too complex or expensive. These misconceptions prevent organizations from reaping the full benefits of conversational AI.

Conversational AI Market Geographical Outlook:

• Asia Pacific is witnessing exponential growth during the forecast period

The Asia Pacific region is expected to hold a significant share of the conversational AI market due to various factors. These factors include a large population, expanding smartphone penetration, and more digitalization across industries, promoting conversational AI adoption in countries such as South Korea, China, Japan, and India.

Additionally, large IT companies in China are significantly investing in conversational AI, and the sector is seeing tremendous advancements in chatbots and voice assistants. The region also offers prospects for conversational AI applications in industries including banking, healthcare, and e-commerce. The Asia Pacific might have critical development because of associations' developing information on state-of-the-art client assistance administrations and advances.

 Conversational AI Market Recent Developments:

• In October 2024, Agora released its Conversational AI SDK, which integrates with OpenAI's Realtime API to enable developers to incorporate voice-activated AI into any application.
• In October 2023, Invoca, specializing in conversation intelligence AI solutions for the marketing and sales sectors, enhanced the Signal AI system and launched Signal AI Studio. This solution enables organizations to build custom AI models that glean relevant insights from telephonic conversations. For organizations that seek to engage members, patients, or clients via telephony, Invoca AI allows contact centers and digital marketing teams to collaborate toward maximizing revenue.

Conversational AI Market Scope:

Report Metric	Details
Growth Rate	CAGR of 26.10%
Study Period	2019 to 2029
Historical Data	2019 to 2022
Base Year	2024
Forecast Period	2024 – 2029
Forecast Unit (Value)	USD Billion
Segmentation	Component Deployment Type Technology End-User Geography
Geographical Segmentation	North America, South America, Europe, Middle East and Africa, Asia Pacific
List of Major Companies in the Conversational AI Market	Google Microsoft Amazon Web Services, Inc. IBM Oracle
Customization Scope	Free report customization with purchase

 

The Conversational AI market is analyzed into the following segments:

• By Component
  • Solutions
  • Managed Services
  • Professional Services
    • Training & Consulting
    • System Integration & Implementation
    • Support & Maintenance
• By Deployment
  • On-premises
  • Cloud
• By Type
  • Chatbots
  • Intelligent Virtual Assistant (IVA)
• By Technology
  • Natural Language Processing (NLP)
  • ML and Deep Learning
  • Automatic Speech Recognition (ASR)
• By End-user
  • BFSI
  • Media & Entertainment
  • Retail
  • IT & Telecommunication
  • Healthcare
  • Automotive
  • Travel and Tourism
  • Food & Beverages
  • Others
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • United Kingdom
    • Germany
    • France
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Israel
    • Others
  • Asia Pacific
    • Japan
    • China
    • India
    • South Korea
    • Indonesia
    • Thailand
    • Others

1. INTRODUCTION

1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base and Forecast Years Timeline

1.8. Key Benefits to the Stakeholder

2. RESEARCH METHODOLOGY  

2.1. Research Design

2.2. Research Processes

3. EXECUTIVE SUMMARY

3.1. Key Findings

3.2. CXO Perspective

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

4.5. Analyst View

5. CONVERSATIONAL AI MARKET BY COMPONENT

5.1. Introduction

5.2. Solutions

5.3. Managed Services

5.4. Professional Services

5.4.1. Training & Consulting

5.4.2. System Integration & Implementation

5.4.3. Support & Maintenance

6. CONVERSATIONAL AI MARKET BY DEPLOYMENT

6.1. Introduction

6.2. Cloud

6.3. On-Premise

7. CONVERSATIONAL AI MARKET BY TYPE

7.1. Introduction

7.2. Chatbots

7.3. Intelligent Virtual Assistant (IVA)

8. CONVERSATIONAL AI MARKET BY TECHNOLOGY

8.1. Introduction

8.2. Natural Language Processing (NLP)

8.3. ML and Deep Learning

8.4. Automatic Speech Recognition (ASR)

9. CONVERSATIONAL AI MARKET BY END-USER

9.1. Introduction

9.2. BFSI

9.3. Media & Entertainment

9.4. Retail

9.5. IT & Telecommunication

9.6. Healthcare

9.7. Automotive

9.8. Travel and Tourism

9.9. Food & Beverages

9.10. Others

10. CONVERSATIONAL AI MARKET BY GEOGRAPHY

10.1. Introduction

10.2. North America

10.2.1. By Component

10.2.2. By Deployment

10.2.3. By Type

10.2.4. By Technology

10.2.5. By End-User

10.2.6. By Country

10.2.6.1. United States

10.2.6.2. Canada

10.2.6.3. Mexico

10.3. South America

10.3.1. By Component

10.3.2. By Deployment

10.3.3. By Type

10.3.4. By Technology

10.3.5. By End-User

10.3.6. By Country

10.3.6.1. Brazil

10.3.6.2. Argentina

10.3.6.3. Others

10.4. Europe

10.4.1. By Component

10.4.2. By Deployment

10.4.3. By Type

10.4.4. By Technology

10.4.5. By End-User

10.4.6. By Country

10.4.6.1. United Kingdom

10.4.6.2. Germany

10.4.6.3. France

10.4.6.4. Spain

10.4.6.5. Others

10.5. Middle East and Africa

10.5.1. By Component

10.5.2. By Deployment

10.5.3. By Type

10.5.4. By Technology

10.5.5. By End-User

10.5.6. By Country

10.5.6.1. Saudi Arabia

10.5.6.2. UAE

10.5.6.3. Others

10.6. Asia Pacific

10.6.1. By Component

10.6.2. By Deployment

10.6.3. By Type

10.6.4. By Technology

10.6.5. By End-User

10.6.6. By Country

10.6.6.1. Japan

10.6.6.2. China

10.6.6.3. India

10.6.6.4. South Korea

10.6.6.5. Indonesia

10.6.6.6. Thailand

10.6.6.7. Others

11. COMPETITIVE ENVIRONMENT AND ANALYSIS

11.1. Major Players and Strategy Analysis

11.2. Market Share Analysis

11.3. Mergers, Acquisitions, Agreements, and Collaborations

11.4. Competitive Dashboard

12. COMPANY PROFILES

12.1. Google

12.2. Microsoft

12.3. Amazon Web Services, Inc.

12.4. IBM

12.5. Oracle

12.6. Nuance Communications, Inc.

12.7. FIS

12.8. SAP SE

12.9. Kore.ai, Inc

Google

Microsoft

Amazon Web Services, Inc.

IBM

Oracle

Nuance Communications, Inc.

FIS

SAP SE

Kore.ai, Inc