Conversational AI Market Latest Trends & Future Opportunities

Posted by Ashish on February 24th, 2020

MarketsandMarkets expects the global Conversational AI market size to grow from USD 4.2 billion in 2019 to USD 15.7 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 30.2% during forecast period (2019–2024). The increasing demand for AI powered customer support services, omni-channel deployment, and reduced chatbot development cost are expected to drive the global conversational AI market.

With the advancements in AI technology during the last couple of years, organizations are making use of conversational AI solutions in their customer service function. Enterprises’ focus has shifted from providing customer support services through emailing or messages to AI-powered chatbots that help enterprises enhance customer experience and engagement. The AI-powered chatbots use NLP technology to carry out human-like conversation and assist the customers in real time. They help enterprises fetch business intelligence about customers’ preferences, opinions, and purchase behavior and enable organizations to provide proactive recommendations and more personalized experience to users based on their account activity.

The major vendors of the conversational AI include IBM (US), Google (US), Microsoft (US), AWS (US), SAP (US), Oracle (US), Baidu (China), Nuance (US), Artificial Solutions (Spain), Conversica (US), Haptik (India), Rasa (Germany), Avaamo (US), Kore.aiI (India), Inbenta (US), Rulai (US), Solvvy (US), Pypestream (US), Creative Virtual (UK) and (India). These players have adopted various growth strategies, such as partnerships, agreements, and collaborations; and new product launches, to further expand their presence in the global conversational AI market. The key players have adopted partnerships and new product launches strategies majorly from 2017 to 2018, which have helped them innovate their offerings and broaden their customer base.

Google is one of the key technology players in the Conversational AI market. It relies heavily on its organic growth strategy and continuously aims for coming up with innovative next-gen products. Google is making significant R&D investments in the area of strategic focus, such as advertising, cloud, Machine Learning (ML), and search, as well as, in new products and services. Google has made significant investments and advancements in AI. The company is well-positioned to take advantage of the increasing demand for AI-enabled applications, AI tools for developers, and cloud-based AI services. Moreover, the company is adopting organic growth strategies to gain a competitive advantage in the conversational AI market. For instance, in April 2018, Google launched an enterprise edition of its Dialogflow platform. The platform would help companies build and run their own bots, without any AI expertise. These bots use AI-based natural language understanding (NLU) and processing to interact with end users.

Microsoft spent significantly on R&D to enhance its Conversational AI and service offerings. The company is working on the development of AI, ML, and IoT technologies. The company has made significant progress with AI initiatives and is well-positioned to take advantage of increasing demand for AI tools, AI-enabled applications, and AI-based solutions. It focuses on organic as well as inorganic growth strategies to strengthen its market position in the global conversational AI market. It has various plans to invest in the latest technologies to develop innovations. In 2018, it has acquired 4 companies: Semantic Machines, Lobe Artificial Intelligence, GitHub, and Bonsai. These acquisitions would enable Microsoft to strengthen its imperatives of putting simple and effective AI developments into the hands of non-engineers and non-experts.

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