Conversational AI Market Size to Grow at a CAGR of 20.0% | Valuates Reports

Conversational AI Market Statistics 2030

The global conversational AI market size was valued at USD 5.78 billion in 2020 and is projected to reach USD 32.62 billion by 2030, registering a Compound Annual Growth Rate (CAGR) of 20.0% from 2021 to 2030.

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The conversational AI market is being driven ahead by an increase in demand for AI-powered customer support services, omnichannel implementation, and decreasing chatbot development costs. Additionally, during COVID-19, a growing emphasis on customer engagement and the demand for AI-based chatbots to stay connected and informed are significant factors enhancing conversational AI offerings. These developments are anticipated to present opportunities for companies engaged in a variety of conversational AI market verticals. The goal of conversational artificial intelligence is to enable computer programs to process, comprehend, and naturally reply to user speech and text commands. The use of touch, text, and gestures to communicate with gadgets, websites, and applications is made possible by conversation AI, an improved kind of artificial intelligence.

Furthermore, Chatbots and other digitalized platforms are used in conversational artificial intelligence to provide clients with a platform where they can solve their problems and communicate with virtual assistants. This even helps organizations expand by implementing new customer-communication strategies.

Natural language processing and machine learning are combined in conversational artificial intelligence. NLP is made to work in a continuous loop with machine learning techniques to improve AI algorithms. Machine algorithms then improve their response quality over time as they learn more.

However, a lack of knowledge regarding conversational AI solutions is limiting industry expansion. Contrarily, it is anticipated that throughout the projected period, an increase in customer engagement on social media platforms would offer attractive chances for the expansion of the conversational AI market.

Conversational AI is intended to be used in a combination with intelligent virtual agents or chatbots to interact with a complex system in a faster and reliable way. Further, applied conversational artificial intelligence requires the combination of art and science to create a digital application that incorporates relevance, context, and personalization within an interaction between human and computers.

Conversational artificial intelligence unites machine learning technology with natural language processing (NLP). NLP is designed to flow into a constant loop with machine learning processes to enhance AI algorithms continuously. Subsequently, machine algorithms advance their response quality over time with improvement in learning.

The conversational AI market share is expected to witness notable growth during the forecast period, owing to rise in demand for AI-powered customer support services. Furthermore, rise in demand for AI-based Gartner chatbots solutions has driven the growth of the market. Moreover, surge in deployment of omnichannel methods is expected to propel the conversational AI market growth during the forecast period. However, a lack of awareness about conversational artificial intelligence solutions restrains market growth. On the contrary, rise in customer engagement through social media platforms is expected to provide lucrative opportunities for the growth of the conversational AI market during the forecast period.

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Trends Influencing Conversational AI Market

The COVID-19 outbreak dramatically accelerated the development of conversational AI-based technologies, such as conversational bots, in 2020. However, a number of challenges brought about by the COVID-19 pandemic, such as a shortage of skilled labor and partial or total lockdowns worldwide, had the biggest impact on the industry. In contrast, the conversational AI market is expected to rise due to the rapid use of chatbot solutions in the healthcare, retail & e-commerce, and telecommunications sectors.


The Conversational AI Market is anticipated to grow in response to the rising demand for AI-powered customer support services. Customers that seek assistance through call centers, the internet, emails, and applications are referred to as using customer service. Thanks to advancements in AI technology, businesses are increasingly embracing conversational AI solutions to deliver excellent customer support. AI-powered chatbots conduct human-like interactions and offer clients in-the-moment support using NLP technology. They help companies collect information on customer tastes, opinions, and shopping patterns so they can provide proactive recommendations and more individualized experiences based on account activity. Additionally, repetitive and manual tasks like order placement, balance inquiries, general questions, technical support, and other customer services can be automated using AI-enabled chatbots and virtual agents.


Every additional second a business may save from a typical customer support interaction results in financial savings and happy customers. An intelligent virtual agent may be able to do elementary and routine tasks without the need for a human agent. Additionally, it can collect crucial customer information and have it available for the agent to utilize to enhance the interaction, such as an account number, a personal identification number, or a brief description of their issue. By letting the agent concentrate on the customer rather than requesting information, time is saved. This element is anticipated to fuel the Conversational AI Market even more.


Call center solutions that lessen the workload on live operators while maintaining a high level of customer care have been sought after by businesses continuously. These firms benefit from the use of intelligent virtual assistants to divert clients away from artificial assistants and toward live chat, email, and phone channels. When a human operator is needed, they can take over and divert consumer demands. This makes sure that the time customer service representatives spend on the phone is helping people with special or delicate situations that call for a human touch. The Conversational AI Market is then anticipated to grow as a result.


However, over the projected period, a surge in the usage of chatbot solutions across the healthcare, retail & e-commerce, and telecommunications sectors would be the primary factor driving the growth of the conversational AI market.

Conversational AI Market Segment Review

Conversational AI Market Size, Share, Growth & Trends Analysis Report By Component, Deployment, Type, and Technology, and End User: Global Opportunity Analysis and Industry Forecast, 2021-2030

The component, deployment, type, technology, and end-user segments of the worldwide conversational AI market have been identified. The conversational AI market is divided into platforms and services based on components (support & maintenance, training & consulting, and system integration). In terms of revenue, the platform segment dominated the market in 2020, and it is anticipated that this trend will continue throughout the forecast period.

Based on deployment, the conversational AI market is separated into the cloud and on-premises deployments. In 2020, the cloud market contributed the most to overall revenue. It is anticipated that during the forecast period, the cloud market will gain a sizable market share. The market is divided into IVA and chatbots according to type. The market for chatbots, which grew to the largest share in 2020, is anticipated to expand rapidly between 2021 and 2030.

Based on technology, the market is classified into machine learning, deep learning, NLP, and automated speech recognition. The NLP segment dominated the market, in terms of revenue, in 2020, and is expected to follow the same trend during the forecast period. By end user, the market is fragmented into BFSI, retail & e-commerce, healthcare & life science, travel & hospitality, telecom, media & entertainment, and others. Retail & E-commerce segment was the dominant segment, in terms of revenue, in 2020, and is anticipated to witness significant growth during the forecast period.

Machine learning, deep learning, natural language processing, and automated speech recognition are the different technological segments of the market. In terms of revenue, the NLP segment dominated the market in 2020 and is anticipated to continue on this path over the next several years.


The market is divided into different segments based on the end user, including BFSI, retail and e-commerce, healthcare and life science, travel and hospitality, telecom, media & entertainment, and others. The retail and e-commerce segment, which dominated the market in terms of revenue in 2020, is expected to grow rapidly over the forecast period.

The conversational AI market trends in North America (the U.S. and Canada), Europe (the UK, Germany, France, Italy, and the rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Taiwan, and the rest of Asia-Pacific), and LAMEA are all examined regionally (Latin America, the Middle East, and Africa). The U.S. in particular continues to play a prominent role in the global conversational AI market in North America. Major businesses and government agencies in the nation are heavily investing in technology.

Top Impacting Factors

Significant factors that impact the growth of the global conversational AI industry include surge in demand for AI-based chatbots solutions and increase in demand for artificial intelligence-powered customer support services. However, absence of knowledge about conversational artificial intelligence-powered solutions acts as a prime barrier for early adoption, which hampers the growth of the market. On the contrary, rise in deployment of omnichannel methods coupled growth in client engagement through social media platforms is expected to offer potential growth opportunity for the conversational AI market during the forecast period.

Competitive Analysis

In this report, the top conversational AI market players are analyzed in terms of their competitive landscape and company profiles. These companies include Amazon Web Services Inc., Artificial Solutions Holding ASH AB, Baidu Inc., Haptik, IBM Corporation, Microsoft Corporation, Oracle Corporation, Google LLC, SAP ERP, and Conversica, Inc. To improve their market penetration and solidify their position in the sector, these important companies have implemented a variety of measures, including product portfolio expansion, mergers & acquisitions, partnerships, geographic expansion, and collaborations.

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