Conversational AI

Conversational AI encompasses the platforms and technologies that enable natural language dialogue between humans and machines, including chatbots, virtual assistants, voice AI, and the enterprise platforms that deploy conversational interfaces for customer service, sales, and internal operations. The sector has been transformed by large language models: pre-LLM chatbots relied on rigid decision trees and intent classification that frustrated users with narrow, scripted interactions, while LLM-powered conversational AI can understand context, handle unexpected queries, and generate natural responses across virtually any topic. The enterprise conversational AI market is projected to exceed $30 billion by 2028, driven by the economic case for automating customer interactions (the average customer service call costs $7-12 to handle by a human agent versus $0.10-0.50 for an AI). Companies like Intercom (Fin AI), Ada, Forethought, and Sierra AI are building AI agents that resolve customer issues end-to-end without human intervention, achieving 50-80% automated resolution rates for many companies. The shift from deflection (routing customers away from human agents) to resolution (actually solving problems) represents the current maturation of the category.