The global Conversational AI market’s value is expected to grow to over $15 billion by 2024, nearly four times more than the $4 billion it is estimated to be worth today.
To put it simply, Conversational Artificial Intelligence (AI) is the sum of technologies needed to enable a simulated conversation with a computer. Simulated, because when your digital assistant of choice gives you an answer, it is a predefined response based on programmed algorithms, not a cognitive reply. The technology is improving at such a rate that we often forget the simulated part and chat freely with our devices without giving it a second thought. That is the promising future investors are betting on.
The market is dominated by the usual, American, suspects like Google, IBM, Microsoft and Facebook but the competition is not sleeping. In 2017 Baidu introduced DuerOS to the market, an AI system built to provide a conversational solution for IoT applications. In this short time it is reported to already be running on over 400 million devices, ranging from smart speakers to washing machines.
A Broad Market
Smart speakers and controlling gadgets are not the only areas of application for Conversational AI. The better the technology gets the larger and more diversified the market gets and that is why investors are not only concentrating on the obvious big players.
Customer Service
One of the first applications for Conversational AI that comes to mind is customer service. We are not talking about the annoying answering machines that ask you for number inputs. AI applications will be able to offer you a plethora of services from answering questions about your orders and contracts, to closing contracts. This all without long waits for a free operator.
Uniphore, an Indian based company founded in 2008, has managed to raise close to $70 million for its customer support solutions.
It is worth mentioning that some of Uniphors main competitors are in its home town of Chennai. This shows that the market is not limited to North American companies and that there is plenty of room for competition in, an estimated $350 billion, customer service market.
Transcription and Captioning
Verbit is a Telaviv based company that is taking a hybrid approach to speech-to-text solutions. Combining AI with human oversight and an adaptive algorithm, the company is achieving close to perfect results.
Where voice commands only need to recognize specific keywords to function, speech-to-text solutions are expected to provide accurate results. Verbit is putting emphasis on its university transcription services, with success; the startup has built a good customer base of Colleges, Universities and even legal firms. Its success has also attracted $34 million in funding so far, to push growth and support further development.
Audio Search
Podcasts, or generally audio content, are growing in popularity and in some cases replacing reading. Audioburst is building a library of audio content by indexing music and podcasts and making them searchable. As some put it, they want to become the Google of audio.
Apart from $25 million total funding, Audioburst has entered partnerships with the likes of LG and Hyundai, giving it a foothold in the infotainment business.
It is more than Google and Amazon
Digital habits are constantly changing, voice calls made way for texting, podcasts are killing the blog and AI assistants are the future. Everybody is bidding for a piece of the cake, striving for their own platform, independent from the Siris and Alexas of the world. Maybe that is why companies like Soundhound, that develop conversational AI solutions, are getting hundreds of millions of dollars investment.
We use it every day, maybe even take it for granted, but conversational AI is going to be crucial to our day to day interaction with computers, the internet and all the gadgets we so eagerly surround ourselves with.
