Conversational AI Market Forecasts to 2030 – Global Analysis By Offering (Software and Services), Deployment Mode (On-Premises and Cloud), Conversational Interface (Chatbots, Intelligent Virtual Assistants (IVAs) and Interactive Voice Response (IVR) Syste

Conversational AI Market Forecasts to 2030 – Global Analysis By Offering (Software and Services), Deployment Mode (On-Premises and Cloud), Conversational Interface (Chatbots, Intelligent Virtual Assistants (IVAs) and Interactive Voice Response (IVR) Systems), Use Case, Technology, End User and By Geography


According to Stratistics MRC, the Global Conversational AI Market is accounted for $11.6 billion in 2024 and is expected to reach $42.2 billion by 2030, growing at a CAGR of 23.9% during the forecast period. Artificial intelligence (AI) that mimics human speech and text interactions is known as conversational AI. It uses machine learning, speech recognition, and natural language processing (NLP) to comprehend user inquiries and provide insightful answers. Virtual assistants, chatbots, and interactive voice response systems are applications that are frequently used in various industries to improve user experiences, expedite communication, and improve customer support. Conversational AI attempts to make interactions between users and systems smooth and interesting by imitating human speech.

According to Gartner, there is an anticipated 24% increase in call center investments in 2024, driven by conversational AI tools.

Market Dynamics:

Driver:

Increasing demand for Ai-driven customer support

Businesses are increasingly adopting conversational AI solutions to automate customer interactions, leading to operational efficiency and cost savings. AI-powered chatbots and virtual assistants can handle high volumes of customer queries 24/7, providing instant responses and personalized experiences. This trend is particularly evident in industries such as retail, banking, and e-commerce, where customer service is crucial. The ability of conversational AI to scale support operations while maintaining quality is driving its widespread adoption.

Restraint:

Limited language and regional capabilities

Most conversational AI products currently offer support for a limited number of languages, with better compatibility for English. This limitation hinders the global adoption of conversational AI solutions, especially in regions where English is not the primary language. The challenge of developing AI models that can understand and respond accurately to various languages, dialects, and cultural nuances is substantial. This constraint can potentially slow down market growth in non-English-speaking regions and limit the effectiveness of conversational AI in diverse global markets.

Opportunity:

Usage of omnichannel communication

Integrating conversational AI across multiple channels, such as websites, mobile apps, social media platforms, and voice-activated devices, enhances the overall customer experience. This approach allows businesses to maintain consistent and contextual interactions with customers across various touchpoints. Omnichannel deployment enables seamless customer journeys, improves engagement, and provides valuable insights into customer behavior. As businesses strive to offer cohesive experiences across all channels, the demand for versatile conversational AI solutions capable of supporting omnichannel strategies is expected to grow substantially.

Threat:

Data privacy

Data privacy concerns pose a significant threat to the conversational AI market. As conversational AI systems collect and process large amounts of personal and potentially sensitive user data, there are growing concerns about data security, privacy breaches, and compliance with data protection regulations. Users may be hesitant to engage with AI-powered systems if they perceive a risk to their personal information. Additionally, stringent data protection laws like GDPR in Europe and CCPA in California require businesses to implement robust data protection measures. Failure to address these concerns adequately could lead to reduced user trust and adoption, potentially hindering market growth.

Covid-19 Impact:

The COVID-19 pandemic had a positive impact on the conversational AI market. As businesses shifted to remote operations and digital interactions, the demand for AI-powered customer support and engagement solutions surged. Conversational AI technologies were rapidly adopted to handle increased customer inquiries, automate processes, and maintain business continuity. The pandemic accelerated digital transformation efforts, leading to increased investments in AI technologies, including conversational AI, to enhance customer experiences and operational efficiency.

The software segment is expected to be the largest during the forecast period

The software segment is predicted to secure the largest market share throughout the forecast period. This dominance can be attributed to the increasing adoption of conversational AI platforms across various industries. Software solutions, including natural language processing (NLP) engines, machine learning algorithms, and dialogue management systems, form the core of conversational AI capabilities. These software components enable businesses to create, deploy, and manage intelligent virtual assistants and chatbots. The flexibility, scalability, and continuous improvements in AI software technologies contribute to its larger market share as organizations seek to enhance customer interactions and automate processes.

The cloud-based segment is expected to have the highest CAGR during the forecast period

The cloud-based segment is projected to have the highest CAGR in the conversational AI market during the extrapolated period. This rapid growth is driven by the numerous advantages offered by cloud-based solutions, including scalability, cost-effectiveness, and ease of deployment. Cloud-based conversational AI platforms allow businesses to quickly implement and scale their AI-powered customer engagement solutions without significant upfront infrastructure investments. The flexibility to integrate with existing systems and the ability to leverage advanced AI capabilities through cloud services contribute to the segment's high growth rate.

Region with largest share:

The Asia Pacific region is projected to account for the largest market share during the forecast period. This dominance is attributed to rapid digitalization, increasing adoption of AI technologies, and the presence of large consumer markets in countries like China and India. The region's strong focus on technological innovation, coupled with government initiatives promoting AI adoption, contributes to its market leadership. The growing e-commerce sector, expanding digital payment systems, and increasing smartphone penetration further drive the demand for conversational AI solutions in customer service and engagement applications across various industries.

Region with highest CAGR:

The Asia Pacific region is projected to achieve the highest CAGR during the forecast period. This rapid growth is fueled by factors such as the increasing awareness of AI technologies, rising investments in digital transformation, and the growing demand for automated customer service solutions. The region's large and tech-savvy population, coupled with the rapid expansion of online businesses, creates fertile ground for conversational AI adoption. Additionally, government initiatives supporting AI development and the presence of numerous tech startups contribute to the region's accelerated growth in the conversational AI market.

Key players in the market

Some of the key players in Conversational AI Market include Microsoft, IBM, Google, Amazon Web Services (AWS), SAP, Oracle, Nuance Communications, Artificial Solutions, Kore.ai, LivePerson, Avaamo, Conversica, Haptik, Yellow.ai, Cognigy.AI, Amelia, Verint, and Boost.ai.

Key Developments:

In October 2024, at the 10th edition of the Google for India event, Google announced Hindi support for Google Gemini Live, a more sophisticated version of its Gemini AI chatbot. Gemini Live will soon expand to include eight additional Indian languages. Google also revealed that Indian users listen to AI Overview responses more frequently than users in other countries.

In August 2024, AWS has entered into a Strategic Collaboration Agreement with PolyAI, a leader in customer-led conversational AI solutions. This collaboration aims to accelerate the adoption of generative voice AI capabilities within enterprise contact centers. PolyAI will leverage Amazon SageMaker and Amazon Bedrock to train and fine-tune an integrated suite of speech recognition, large language models (LLMs), and text-to-speech models.

Offerings Covered:
• Software
• Services

Deployment Modes Covered:
• On-Premises
• Cloud

Conversational Interfaces Covered:
• Chatbots
• Intelligent Virtual Assistants (IVAs)
• Interactive Voice Response (IVR) Systems

Use Cases Covered:
• Customer Support & Engagement
• Personal Assistants
• Branding & Marketing
• Employee Communication
• Contact Centers
• Sales & E-commerce
• Other Use Cases

Technologies Covered:
• Natural Language Processing (NLP)
• Automated Speech Recognition (ASR)
• Machine Learning (ML)
• Deep Learning
• Other Technologies

End Users Covered:
• Banking, Financial Services, & Insurance (BFSI)
• Retail & E-commerce
• Healthcare
• Media & Entertainment
• Automotive
• Telecom
• Travel & Hospitality
• Government
• Other End Users

Regions Covered:
• North America
US
Canada
Mexico
• Europe
Germany
UK
Italy
France
Spain
Rest of Europe
• Asia Pacific
Japan
China
India
Australia
New Zealand
South Korea
Rest of Asia Pacific
• South America
Argentina
Brazil
Chile
Rest of South America
• Middle East & Africa
Saudi Arabia
UAE
Qatar
South Africa
Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2022, 2023, 2024, 2026, and 2030
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements


1 Executive Summary
2 Preface
2.1 Abstract
2.2 Stake Holders
2.3 Research Scope
2.4 Research Methodology
2.4.1 Data Mining
2.4.2 Data Analysis
2.4.3 Data Validation
2.4.4 Research Approach
2.5 Research Sources
2.5.1 Primary Research Sources
2.5.2 Secondary Research Sources
2.5.3 Assumptions
3 Market Trend Analysis
3.1 Introduction
3.2 Drivers
3.3 Restraints
3.4 Opportunities
3.5 Threats
3.6 Technology Analysis
3.7 End User Analysis
3.8 Emerging Markets
3.9 Impact of Covid-19
4 Porters Five Force Analysis
4.1 Bargaining power of suppliers
4.2 Bargaining power of buyers
4.3 Threat of substitutes
4.4 Threat of new entrants
4.5 Competitive rivalry
5 Global Conversational AI Market, By Offering
5.1 Introduction
5.2 Software
5.3 Services
6 Global Conversational AI Market, By Deployment Mode
6.1 Introduction
6.2 On-Premises
6.3 Cloud
7 Global Conversational AI Market, By Conversational Interface
7.1 Introduction
7.2 Chatbots
7.3 Intelligent Virtual Assistants (IVAs)
7.4 Interactive Voice Response (IVR) Systems
8 Global Conversational AI Market, By Use Case
8.1 Introduction
8.2 Customer Support & Engagement
8.3 Personal Assistants
8.4 Branding & Marketing
8.5 Employee Communication
8.6 Contact Centers
8.7 Sales & E-commerce
8.8 Other Use Cases
9 Global Conversational AI Market, By Technology
9.1 Introduction
9.2 Natural Language Processing (NLP)
9.3 Automated Speech Recognition (ASR)
9.4 Machine Learning (ML)
9.5 Deep Learning
9.6 Other Technologies
10 Global Conversational AI Market, By End User
10.1 Introduction
10.2 Banking, Financial Services, & Insurance (BFSI)
10.3 Retail & E-commerce
10.4 Healthcare
10.5 Media & Entertainment
10.6 Automotive
10.7 Telecom
10.8 Travel & Hospitality
10.9 Government
10.10 Other End Users
11 Global Conversational AI Market, By Geography
11.1 Introduction
11.2 North America
11.2.1 US
11.2.2 Canada
11.2.3 Mexico
11.3 Europe
11.3.1 Germany
11.3.2 UK
11.3.3 Italy
11.3.4 France
11.3.5 Spain
11.3.6 Rest of Europe
11.4 Asia Pacific
11.4.1 Japan
11.4.2 China
11.4.3 India
11.4.4 Australia
11.4.5 New Zealand
11.4.6 South Korea
11.4.7 Rest of Asia Pacific
11.5 South America
11.5.1 Argentina
11.5.2 Brazil
11.5.3 Chile
11.5.4 Rest of South America
11.6 Middle East & Africa
11.6.1 Saudi Arabia
11.6.2 UAE
11.6.3 Qatar
11.6.4 South Africa
11.6.5 Rest of Middle East & Africa
12 Key Developments
12.1 Agreements, Partnerships, Collaborations and Joint Ventures
12.2 Acquisitions & Mergers
12.3 New Product Launch
12.4 Expansions
12.5 Other Key Strategies
13 Company Profiling
13.1 Microsoft
13.2 IBM
13.3 Google
13.4 Amazon Web Services (AWS)
13.5 SAP
13.6 Oracle
13.7 Nuance Communications
13.8 Artificial Solutions
13.9 Kore.ai
13.10 LivePerson
13.11 Avaamo
13.12 Conversica
13.13 Haptik
13.14 Yellow.ai
13.15 Cognigy.AI
13.16 Amelia
13.17 Verint
13.18 Boost.ai
List of Tables
Table 1 Global Conversational AI Market Outlook, By Region (2022-2030) ($MN)
Table 2 Global Conversational AI Market Outlook, By Offering (2022-2030) ($MN)
Table 3 Global Conversational AI Market Outlook, By Software (2022-2030) ($MN)
Table 4 Global Conversational AI Market Outlook, By Services (2022-2030) ($MN)
Table 5 Global Conversational AI Market Outlook, By Deployment Mode (2022-2030) ($MN)
Table 6 Global Conversational AI Market Outlook, By On-Premises (2022-2030) ($MN)
Table 7 Global Conversational AI Market Outlook, By Cloud (2022-2030) ($MN)
Table 8 Global Conversational AI Market Outlook, By Conversational Interface (2022-2030) ($MN)
Table 9 Global Conversational AI Market Outlook, By Chatbots (2022-2030) ($MN)
Table 10 Global Conversational AI Market Outlook, By Intelligent Virtual Assistants (IVAs) (2022-2030) ($MN)
Table 11 Global Conversational AI Market Outlook, By Interactive Voice Response (IVR) Systems (2022-2030) ($MN)
Table 12 Global Conversational AI Market Outlook, By Use Case (2022-2030) ($MN)
Table 13 Global Conversational AI Market Outlook, By Customer Support & Engagement (2022-2030) ($MN)
Table 14 Global Conversational AI Market Outlook, By Personal Assistants (2022-2030) ($MN)
Table 15 Global Conversational AI Market Outlook, By Branding & Marketing (2022-2030) ($MN)
Table 16 Global Conversational AI Market Outlook, By Employee Communication (2022-2030) ($MN)
Table 17 Global Conversational AI Market Outlook, By Contact Centers (2022-2030) ($MN)
Table 18 Global Conversational AI Market Outlook, By Sales & E-commerce (2022-2030) ($MN)
Table 19 Global Conversational AI Market Outlook, By Other Use Cases (2022-2030) ($MN)
Table 20 Global Conversational AI Market Outlook, By Technology (2022-2030) ($MN)
Table 21 Global Conversational AI Market Outlook, By Natural Language Processing (NLP) (2022-2030) ($MN)
Table 22 Global Conversational AI Market Outlook, By Automated Speech Recognition (ASR) (2022-2030) ($MN)
Table 23 Global Conversational AI Market Outlook, By Machine Learning (ML) (2022-2030) ($MN)
Table 24 Global Conversational AI Market Outlook, By Deep Learning (2022-2030) ($MN)
Table 25 Global Conversational AI Market Outlook, By Other Technologies (2022-2030) ($MN)
Table 26 Global Conversational AI Market Outlook, By End User (2022-2030) ($MN)
Table 27 Global Conversational AI Market Outlook, By Banking, Financial Services, & Insurance (BFSI) (2022-2030) ($MN)
Table 28 Global Conversational AI Market Outlook, By Retail & E-commerce (2022-2030) ($MN)
Table 29 Global Conversational AI Market Outlook, By Healthcare (2022-2030) ($MN)
Table 30 Global Conversational AI Market Outlook, By Media & Entertainment (2022-2030) ($MN)
Table 31 Global Conversational AI Market Outlook, By Automotive (2022-2030) ($MN)
Table 32 Global Conversational AI Market Outlook, By Telecom (2022-2030) ($MN)
Table 33 Global Conversational AI Market Outlook, By Travel & Hospitality (2022-2030) ($MN)
Table 34 Global Conversational AI Market Outlook, By Government (2022-2030) ($MN)
Table 35 Global Conversational AI Market Outlook, By Other End Users (2022-2030) ($MN)
Note: Tables for North America, Europe, APAC, South America, and Middle East & Africa Regions are also represented in the same manner as above.

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