
Chatbot vs. Conversational AI

Conversational artificial intelligence (AI) is reshaping the world of customer service through virtual agents, chatbots and other advanced software. Customers can interact with conversational AI mediums as if speaking with another human.
It's no shock that the global conversational AI market was worth an estimated $7.61 billion in 2022. From 2023 to 2030, it's projected to grow at a whopping 23.6% compound annual growth rate (CAGR). Chatbots are a popular form of conversational AI, handling high-level conversations and complex tasks.
How exactly do chatbots differ from conversational AI? Chatbots parrot human conversation to automate specific customer service tasks, such as query responses. Conversational AI is a broader term. Besides chatbots, it encompasses several types of innovative software that imitate human conversation.
Keep reading to learn more about how chatbots and conversational AI work.
What Is Conversational AI?
Conversational AI simulates human conversation using machine learning (ML) and natural language processing (NLP). Trained on large amounts of data like speech and text, it enables chatbots to understand human language and provide appropriate responses.
Conversational AI is context-aware and supports a variety of communication channels, including text, video and voice. This versatility allows it to understand requests with multiple inputs and outputs. It constantly learns from its interactions to improve its responses over time.
What Are Some Other Examples of Conversational AI?
Aside from chatbots, here are some other types of conversational AI.
1. Generative AI Agents
Generative AI agents are computer programs that use interactive software to mimic human actions and responses. These virtual agents use generative AI — which creates original and realistic text, images, videos and other media — to power voice or text conversations. They can make inferences about themselves and others, recall previous experiences and formulate strategies based on their surroundings.
2. Speech Recognition Software
This software transforms words spoken into a microphone into a text-based format. It's generally used to transcribe phone calls, lectures, captions and more.
3. Text-to-Speech (TTS) Software
Also called "read-aloud technology," TTS software takes written words on a computer or digital device and changes them into audio form. It is trained to read digital text aloud, as the name implies.
You can essentially think of TTS as the opposite of speech recognition software, converting text to speech instead of speech to text. It is often used to generate spoken directions and audiobooks. TTS can also enable easier information processing for people with various reading challenges, such as vision impairments, dyslexia and dysgraphia.

