Conversational Artificial Intelligence

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What Does Conversational Artificial Intelligence Mean?

Conversational AI is the branch of artificial intelligence that supports human-to-computer and computer-to-human spoken and text interactions. Conversational AI plays an important role in the development of chatbots and interactive voice response (IVR) systems.


Unlike traditional chatbots, which are rules-based and scripted, conversational AI bots can use machine learning (ML) algorithms, deep learning and predictive analytics to extend the chatbot’s knowledge base in real time. Over time, as the AI chatbot answers more questions, the digital user experience (DEX) will continually improve.

Conversational AI uses application programming interfaces (APIs) to locate the most relevant output from multiple internal and external sources, including the internet. This branch of AI uses natural language processing (NLP) to parse the request and natural language understanding (NLU) to understand the intent of a request.

While AI-supported chatbots are often used to answer simple questions, their ability to learn and autonomously select the most relevant conversational flow makes them a good choice for leading end users through a complex transaction step-by-step.

Techopedia Explains Conversational Artificial Intelligence

Conversational AI plays an important role in digital experience management (DEX). Because the back-end of an AI chatbot allows it to access data from multiple sources, companies can often use the same bot on more than one digital channel.

Chatbots vs. Conversational AI

It’s important to understand that not all chatbots are created equal. Traditional rules-based chatbots are scripted and can only complete a limited number of tasks. Typically, this means providing an answer from a list of frequently asked questions (FAQ) and not much else. Historically, rules-based chatbots were stand-alone applications.

In contrast, conversational AI bots are more flexible and can help meet the demands of larger enterprises because they actually understand human language. This capability allows them to understand intent and respond more accurately to ad-hoc questions. It also allows them to adjust conversational flows dynamically to improve relevancy. Because conversational AI chatbots have the ability to use APIs, they can access data from multiple sources, both locally and in the cloud.

Benefits of Conversational AI

Conversational AI offers a variety of customer-facing and operational benefits for both large enterprises, as well as small-to-mid-sized businesses. They include:

24/7 Availability: In today’s connected world, it’s not unexpected that customers should want to interact with a business outside of office hours. Chatbots present a fast and scalable way to answer customer queries at any time.

Instant Response Times: Consumers value speed and convenience when seeking help online. Conversational AI can help companies build their brand by having a chatbot provide customers with immediate, accurate responses.

Increased Revenue: Chatbots powered by conversational AI can use APIs to interface with a customer’s account. This allows them to suggest products and services the customer may be interested in to increase sales and drive revenue.

Keep Costs Down: A scalable, conversational AI-powered chatbot can do the equivalent work of hundreds of human agents. The right bot can help an organization improve customer service without needing to onboard additional staff.

Increase employee efficiency: AI frees up employees to focus on high-value customer interactions because AI chatbots can automate customer self-service and become more accurate in its responses without explicit programming.

Opens up new channels: Conversational user interfaces (CUIs) allow enterprises to deploy and test new, fully-automated omnichannel experiences for sales, service and support without requiring managers to write and maintain conversational scripts.

Bolsters Brand Loyalty: When conversational AI is able to provide a customer with a memorable self-service experience, the customer is likely to form a positive association with the brand, become a repeat customer and make more purchases.

Although conversational AI branched out from chatbots, it is unquestionably more advanced. Thanks to continuous innovation in artificial intelligence, machine learning, and natural language understanding — including OpenAI’s GPT  — conversational AI is expected to improve exponentially (instead of incrementally) over the next few years.


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Margaret Rouse
Technology Expert
Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.