AI Chatbots Market to Be Worth $22.6 Billion by 2031

Meticulous Research expects the worldwide market for artificial intelligence chatbots to reach $22.6 billion by 2031, growing at a compound annual rate of 27.8 percent.

The research firm defines AI chatbots as software applications that use artificial intelligence to engage in conversations with humans in a natural manner, either through text or voice, and are designed to simulate human-like communication. AI chatbots are commonly used for customer service, information retrieval, and other tasks that benefit from automated conversations, it said.

The growth of the AI chatbots market is primarily driven by the increasing adoption of AI chatbots in the IT and telecom sectors, a greater emphasis on self-service operations, the rising use of generative models in AI chatbots, and growing demand for 24/7 customer support. However, concerns about data privacy and security could restrain the market's growth, according to Meticulous.

Moreover, the need to automate business processes, the integration of AI chatbots with smart devices, and the increasing use of AI chatbots in retail and e-commerce are expected to create significant growth opportunities for market players. However, misconceptions and a lack of awareness are challenges affecting market growth.

Meticulous also found that among deployment modes, the cloud-based segment is slated to register a higher CAGR due to increasing demand for flexibility in remote management, and growing adoption among small and medium-sized enterprises. These buisinesses, which often have limited manpower, are turning to AI-powered chatbots to handle customer inquiries and support tasks, enabling them to provide timely and effective service without the need for extensive human resources, it said.

Other findings included the expectation for the mobile apps to dominate the market, and for the retail and e-commerce segment to register the highest CAGR, driven by the continued rise of online shopping and digital retail, the demand for 24/7 customer support, the need for instant responses to FAQs, and the integration of AI with CRM and marketing systems.

The research firm also identified OpenAI, Microsoft, Google, Amazon Web Services, NVIDIA, IBM, Perplexity AI, Zoho, GET JENNY, Acuvate, Freshworks, Jasper AI, Anthropic, Writesonic, and Next IT & Systems as key players operating in the AI chatbots market.