USD 13.2 billion
Report ID:
SQMIG45F2072 |
Region:
Global |
Published Date: April, 2025
Pages:
157
|Tables:
88
|Figures:
76
Conversational Artificial Intelligence (AI) Market size was valued at USD 13.2 billion in 2023 and is poised to grow from USD 16.05 billion in 2024 to USD 76.73 billion by 2032, growing at a CAGR of 21.6% during the forecast period (2025-2032).
Conversational artificial intelligence (AI) refers to AI models that can interact and respond to human input or queries. Advancements in artificial intelligence technologies and growing use of AI models for several user-based applications are contributing to the high market growth. Increasing acceptance of AI in multiple applications and growing demand for better human-machine interaction across various industry verticals are also estimated to bolster conversational artificial intelligence (AI) market development in the future. High use of AI-powered customer support and growing demand for automation around the world are also projected to boost the demand for conversational artificial intelligence (AI) going forward. However, challenges in understanding complex queries, data privacy issues, and resistance to adoption are slated to impede conversational artificial intelligence (AI) market growth potential in the long run.
Market snapshot - 2025-2032
Global Market Size
USD 13.2 billion
Largest Segment
Chatbots
Fastest Growth
Chatbots
Growth Rate
21.6% CAGR
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Global Conversational Artificial Intelligence (AI) Market is segmented by Offering, Business Function, Conversational Agent Type, Integration Mode, Vertical and region. Based on Offering, the market is segmented into Software and Services. Based on Business Function, the market is segmented into Sales & Marketing, Finance & Accounting, Operations & Supply Chain, Human Resources (HR) and IT Service Management (ITSM). Based on Conversational Agent Type, the market is segmented into AI Chatbots, Voice Bots, Interactive Voice Assistants (IVA) and Generative AI Agents. Based on Integration Mode, the market is segmented into Internal Enterprise Systems and External Communication Channels. Based on Vertical, the market is segmented into BFSI, Retail & Ecommerce, Education, Media & Entertainment, Healthcare & Life Sciences, Travel & Hospitality, Automotive, IT/ ITEs, Government & Defense and Other Verticals. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
Conversational Artificial Intelligence (AI) Market Analysis by Deployment Mode
Cloud-based conversational artificial intelligence (AI) solutions are projected to account for a dominant share of the global market. Easy deployment and low costs are key benefits that allow this segment to remain popular among users. Advancements in cloud technologies and subscription-based models are also contributing to the high popularity of cloud-based conversational AI models.
On the other hand, the demand for on-premises deployment of conversational AI solutions is projected to increase at a rapid pace over the coming years. Enterprises that focus on data security and want more control of their AI models are projected to contribute to the market growth via this segment.
Conversational Artificial Intelligence (AI) Market Analysis by Technology
Machine learning is estimated to account for a prominent chunk of the global conversational artificial intelligence (AI) market share. This technology helps AI models break down inputs to generate appropriate output and responses. Machine learning can also help AI models adapt better to users and create a personalized experience as well. Machine learning is also crucial in improving AI algorithms to keep the AI model updated with current trends.
On the other hand, the demand for natural language processing technology is slated to increase at a robust pace over the coming years. This technology helps AI models better understand the queries of user and improve human-machine interaction capabilities as well. Rising use of conversational AI models for customer support is projected to help this segment boost market growth in the future.
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High acceptance and rapid adoption of advanced technologies are making North America the leading market for conversational artificial intelligence (AI) companies. Growing number of organizations in this region are focusing on automation of their business, which is also boosting conversational artificial intelligence (AI) adoption in this region. Rising use of conversational AI models in healthcare industry is also creating new opportunities for conversational artificial intelligence (AI) companies in this region. Canada and the United States will be the top markets for conversational artificial intelligence (AI) providers in this region.
Rapidly increasing e-commerce activity and growing emphasis on improving customer support are projected to make the Asia Pacific region a highly opportune one going forward. India, China, and Japan are slated to be the key markets for conversational artificial intelligence (AI) companies in this region. Rising awareness regarding benefits of artificial intelligence and increasing acceptance of the same will also create new business scope for conversational artificial intelligence (AI) providers in the long run.
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Conversational Artificial Intelligence (AI) Market Drivers
Demand for AI Customer Support
Organizations around the world are focusing on improving their customer support and they are doing it by opting for automation using conversational AI models. Round the clock support and better response times with reduced errors are key benefits of AI-powered customer support driving market growth.
Advancements in Natural Language Processing (NLP)
Natural language processing technology is advancing continually, and this has resulted in the development of better and more capable conversational AI models. New conversational AI models with advanced NLP technology are more capable of providing better responses and better human interaction capabilities.
Conversational Artificial Intelligence (AI) Market Restraints
Complex Query Issues
Artificial intelligence is highly advanced but conversational AI models are still struggling with complex queries. Improper responses or inaccurate output in response to complex queries is a common issue that hinders adoption of conversational artificial intelligence (AI) on a global level.
Resistance to Adoption
Conversational artificial intelligence (AI) is faced with high resistance to adoption in multiple applications owing to concerns regarding its reliability and trustworthiness. These concerns need to be addressed to reduce resistance to adoption, which stands as a major constraint for global market development.
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Conversational artificial intelligence (AI) providers should focus on developing and launching new solutions to stay competitive in the market. Utilization of advanced AI algorithms will also be a prime area of interest for all conversational artificial intelligence (AI) companies going forward. Companies can also explore new applications for their offerings to maximize their business scope in the long run. Addressing reliability and data privacy concerns should be the primary target of all conversational AI companies to help unlock the full growth potential of the market.
Conversational Artificial Intelligence (AI) Market Top Player’s Company Profiles
Conversational Artificial Intelligence (AI) Market Recent Developments
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the growing popularity of AI solutions and rising use of AI in customer support are projected to bolster the demand for conversational artificial intelligence (AI) over the coming years. However, data privacy concerns and incorrect response for complex queries are projected to hamper market growth in the future. North America is slated to hold a dominant market share owing to high adoption of conversational AI models by businesses in this region and presence of key conversational artificial intelligence (AI) providers. Developing conversational artificial intelligence (AI) models with better emotional intelligence capabilities will pay off big time for conversational artificial intelligence (AI) companies in the long run.
Report Metric | Details |
---|---|
Market size value in 2023 | USD 13.2 billion |
Market size value in 2032 | USD 76.73 billion |
Growth Rate | 21.6% |
Base year | 2024 |
Forecast period | 2025-2032 |
Forecast Unit (Value) | USD Billion |
Segments covered |
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Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
Companies covered |
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Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Conversational Artificial Intelligence (AI) Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Conversational Artificial Intelligence (AI) Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Conversational Artificial Intelligence (AI) Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Conversational Artificial Intelligence (AI) Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Conversational Artificial Intelligence (AI) Market size was valued at USD 9.5 Billion in 2023 and is poised to grow from USD 11.65 Billion in 2024 to USD 59.84 Billion by 2032, growing at a CAGR of 22.60% during the forecast period (2025-2032).
Conversational artificial intelligence (AI) providers should focus on developing and launching new solutions to stay competitive in the market. Utilization of advanced AI algorithms will also be a prime area of interest for all conversational artificial intelligence (AI) companies going forward. Companies can also explore new applications for their offerings to maximize their business scope in the long run. Addressing reliability and data privacy concerns should be the primary target of all conversational AI companies to help unlock the full growth potential of the market. ' Google, LLC (U.S.) ', ' Microsoft (U.S.) ', ' IBM (U.S.) ', ' Amazon Web Services, Inc. (U.S.) ', ' Baidu (China) ', ' Oracle (U.S.) ', ' SAP SE (Germany) ', ' FIS (U.S.) ', ' Artificial Solutions (Sweden) ', ' Kore.ai, Inc. (U.S.) ', ' Conversica, Inc. (U.S.) ', ' Inbenta Holdings Inc. (U.S.) ', ' Creative Virtual Ltd. (U.S.) ', ' SoundHound AI, Inc. (U.S.) ', ' Avaamo (U.S.) ', ' Jio Haptik Technologies Limited (India) ', ' Solvvy (U.S.) ', ' Cisco Systems, Inc. (U.S.) ', ' Kasisto (U.S.) ', ' Gupshup (U.S.) '
Organizations around the world are focusing on improving their customer support and they are doing it by opting for automation using conversational AI models. Round the clock support and better response times with reduced errors are key benefits of AI-powered customer support driving market growth.
Sentiment Analysis and Emotional Intelligence: Conversational AI companies should invest in developing better sentiment analysis and emotional intelligence capabilities for their AI models. AI solutions that can understand human emotions and recognize sentiments through voice input will make them more human-like and promote market growth in the long run.
High acceptance and rapid adoption of advanced technologies are making North America the leading market for conversational artificial intelligence (AI) companies. Growing number of organizations in this region are focusing on automation of their business, which is also boosting conversational artificial intelligence (AI) adoption in this region. Rising use of conversational AI models in healthcare industry is also creating new opportunities for conversational artificial intelligence (AI) companies in this region. Canada and the United States will be the top markets for conversational artificial intelligence (AI) providers in this region.
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