CONVERSATIONAL AI MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Conversational AI Market Size and Trends

The conversational AI market is estimated to be valued at USD 10.65 Bn in 2024 and is expected to reach USD 44.38 Bn by 2031, growing at a compound annual growth rate (CAGR) of 22.6% from 2024 to 2031.

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The widespread adoption of conversational platforms across industries, such as retail, BFSI, healthcare, travel, and hospitality, is expected to drive significant growth in the market during the forecast period.

The conversational AI market is expected to witness strong growth over the coming years. Increased investment in AI and natural language technologies by major technology companies is supporting the development of more human-like conversational interfaces. Additionally, the need for automation and personalized customer engagement is promoting the adoption of conversational AI solutions in applications such as web virtual assistants, chatbots, and voice assistants.

Growth of AI-powered Customer Support Services

The rise of AI-powered customer support services is significantly contributing to the growth of the conversational AI market. As customers increasingly expect fast, efficient, and personalized experiences, companies are looking at ways to scale their support operations beyond traditional call centers. This is driving a huge demand for AI chatbots and virtual assistants that can handle high volumes of repetitive query handling through natural language conversations 24/7.

Many large enterprises are investing in sophisticated AI solutions that not only answer questions but can also resolve issues by taking required actions. For example, chatbots being deployed by telecom and utility providers can check account balances, make bill payments, track order status, and even activate or deactivate connections upon user request. This is empowering customers with instant self-service options while reducing operational costs for companies. Furthermore, COVID-19 has accelerated the digital transformation of customer support as lockdowns compelled organizations to virtualize their engagements through digital channels.

Going forward, the conversational AI industry is expected to further innovate as AI capabilities keep enhancing. Chatbots and virtual agents will gain abilities to deeply understand context and intent behind queries. They will be equipped with vast knowledge bases covering diverse topics. Embodiments using mediums like augmented reality and voice assistants will provide richer engagement experiences. As AI systems analyze massive conversation data over time, their responses will become more and more human-like and consistent. According to Eurostat, the usage of internet and electronic means of communication for contacting public authorities and utilities had increased in the EU from 32% in 2014 to 41% in 2020. This showcases growing customer preference for digital and AI-powered engagement channels.

Rather than focusing solely on replacing human capabilities, many companies are exploring how AI tools can empower, extend, and enhance human abilities. By developing AI-assisted partnerships between people and technology, new applications and possibilities are emerging. For example, AI agents are being designed to handle initial customer queries, freeing up specialists to work on more complex issues. Within organizations, AI is augmenting knowledge workers through features like search, translation, and automated note-taking. By intelligently routing certain tasks to AI while retaining humans for others, work becomes more efficient and satisfying for all. As both companies and consumers recognize the value in these types of AI-enhanced, human-AI partnerships, it fuels ongoing investment in developing conversational technologies that are useful aids rather than replacements. This collaborative model points the way towards sustained growth for the conversational AI sector.