Conversational AI is a form of technology that utilizes speech-based assistants and facilitates stronger interactions and greater engagement at scale across users and platforms. Conversational AI combines the speech based technology, NLP, and machine learning into a single platform to develop and build applications for any specific as well as for multiple use-cases across different verticals. Conversational AI platforms can be used to build intelligent conversational interfaces so that businesses can easily interact with devices, services, customers, suppliers, and employees at real-time basis.
The major factors fueling the Conversational AI Market growth include the increasing demand for AI powered customer support services, omni-channel deployment, and reduced Chabot development costs. The increasing adoption of conversational AI solutions in customer engagement and retention application could provide growth opportunities for the conversational AI vendors.
The conversational AI market by component has 2 subsegments: platform and services. The services segment is expected to grow at a higher CAGR during the forecast period. Most of the conversational AI vendors offer services, such as consulting and support services, which help enterprises strengthening their customer support imperatives.
The conversational AI market by type has been further segmented into Intelligent Virtual Assistant (IVA) and chatbots. The IVA segment is expected to grow at a higher CAGR during the forecast period. IVA utilizes advanced NLP, natural language understanding (NLU), and dialog management techniques to achieve high levels of automation without sacrificing accuracy. With the help of IVA, complex customer queries can be handled effectively. The growth is attributed to the increasing demand for IVA among enterprises for proving customers better and personalized experience and thus, strengthen customer engagement and retention imperatives.
The conversational AI market by services has 3 subsegments: training and consulting services, system integration and testing services, and support and maintenance services. The system integration and testing services segment is expected to grow at the highest CAGR during the forecast period. System integration and testing services play a significant role, as they are required to build and deploy conversational AI interface on multiple platforms simultaneously.
In the conversational AI market, the technology segment has Machine Learning (ML) and Deep Learning, Natural Language Processing (NLP), and Automated Speech Recognition (ASR) categories. The NLP segment is expected to hold the largest market size during the forecast period. The growth is attributed to its capability to recognize and communicate the content and the sentiments of the speaker (or writer) so that the chatbot and IVA can make use of the provided information and make conversations more natural.