AI Customer Service Market Size, Share, Opportunities, And Trends By Technology (Chatbots, Virtual Assistance, Generative AI-based FAQs, Data Insights From Customers), By Deployment (Cloud, On-Premise, Hybrid), By Application (Finance, Technology Company, Government, Retail, Healthcare, Hospitality, Others), And By Geography - Forecasts From 2024 To 2029

  • Published : Mar 2024
  • Report Code : KSI061616799
  • Pages : 149

The AI customer service market is anticipated to grow significantly over the forecast period.

AI customer service, also known as AI-powered customer support or virtual customer service, refers to the use of artificial intelligence technologies to enhance and automate various aspects of customer service and support operations. AI customer service solutions leverage machine learning, natural language processing (NLP), and automation to understand and respond to customer inquiries, provide personalized assistance, and streamline support workflows.

Some of the key features of AI customer service are virtual assistants, chatbots, natural language understanding (NLU), automation and self-service, and predictive analytics. AI customer service is increasingly utilizing voice-based communications, allowing for real-time connection with consumers. These virtual assistants answer frequent queries, provide product suggestions, help with order tracking, and respond to basic support concerns.

AI uses NLU to analyze human language, which improves customer service by giving relevant and correct replies based on semantics, context, and purpose. IVR technology, which uses voice commands, reduces the need for human contact, allowing clients to obtain information and handle issues autonomously, hence increasing efficiency and convenience.

AI customer care solutions employ predictive analytics and machine learning to anticipate client demands, identify problems, and solve them proactively, therefore optimizing support procedures and increasing customer satisfaction. AI is transforming customer service by creating personalized, efficient, and responsive experiences, improving support operations, lowering costs, and increasing loyalty and retention.

Market Drivers

  • Advancements in AI technologies are fueling the AI customer service market growth

AI and machine learning are transforming customer service by allowing sophisticated algorithms to comprehend and provide human-like replies, automating repetitive jobs, and improving the quality of client interactions, thereby improving the entire customer experience.

Among various AI customer service solutions available in the market, Yuma AI ticket assistant automates customer service using natural language processing. It automates agent tasks such as dealing with customers and reacting to client requests such as changing purchases and canceling subscriptions. It has an intent library, is pre-trained on e-commerce company processes, and recognizes client questions swiftly and properly to offer precise, timely responses.

Another cloud computing product is Custify, which consolidates consumer data to help companies expand, with an emphasis on SaaS providers. It gives actionable information, automates activities, and enables customer success teams to concentrate on client engagements.

The advancements in AI customer service technology improve client experiences, operational efficiency, and competitive differentiation, opening the path for growth and innovation in the rapidly changing customer service industry.

  • Rising adoption of digital channels is contributing to the AI customer service market growth

With an increasing number of digital channels, such as websites, mobile applications, social media, and messaging platforms, organizations require scalable and omnichannel customer care solutions. AI technologies provide seamless integration across numerous channels, allowing businesses to communicate with consumers wherever they are while providing consistent support experiences.

Churn 360 is an AI-powered customer success management tool that enables B2B SaaS enterprises to transform data into actionable insights. It applies automation to customer success procedures that do not require manual involvement. Create assignments, and meetings, and send customized emails at scale. It may be used for various procedures, including onboarding, renewal, and low health score revival.

The rising adoption of digital channels creates opportunities for businesses to enhance their customer service capabilities through AI-driven solutions. By leveraging AI technology to deliver personalized, efficient, and seamless customer experiences across digital channels, businesses can improve customer satisfaction, loyalty, and retention in an increasingly digital-first world.

Market Restraints

  • Data privacy and security concerns hamper the market growth

AI customer service solutions require access to customer data to deliver personalized experiences and insights. However, concerns about data privacy, security breaches, and misuse of personal information may deter customers from engaging with AI-powered chatbots or virtual assistants, particularly in highly regulated industries such as finance and healthcare.

AI customer service market is segmented based on its deployment models-

The AI customer service market is segmented based on its deployment models. Cloud-based deployment model enables organizations to deploy AI customer service solutions in a scalable, flexible, and quick manner, reducing the need for major upfront hardware or infrastructure expenditures.

On-premises deployment entails AI customer service solutions that run within data centers, providing better control, customization, and protection for organizations with tight data privacy, regulatory compliance, or sensitive handling requirements.

Hybrid deployment is a methodology that blends cloud-based and on-premises AI customer service capabilities, providing flexibility, scalability, and customization to suit unique business and compliance requirements.

North America is anticipated to hold a significant share of the AI customer service market.

The North American region is anticipated to hold a significant share of the AI customer service market. North America, particularly the United States, is a hub for technological innovation and research in artificial intelligence (AI) and machine learning (ML). Many leading AI companies, research institutions, and startups based in North America, such as IBM, Microsoft, and Salesforce, are driving advancements in AI-driven customer service solutions.

North America is seeing a spike in the deployment of AI technology across a variety of businesses, boosting consumer interactions and simplifying support processes. Regions region-diversified market, which includes enterprises ranging from startups to global organizations, provides considerable opportunity for AI customer service providers to cater to the region's many sector verticals.

North America's market is predicted to expand rapidly because of its leadership in technology, innovation, and consumer behavior, establishing it as a prominent participant in the global AI customer service industry.

Key Developments

  • May 2023 - Infosys unveiled Infosys Topaz, an AI-first combination of services, solutions, and platforms that employed generative AI technology. It enhances the ability of persons, businesses, and communities to capitalize on the next generation of chances to produce valued through unparalleled innovations, linked ecosystems, and ubiquitous efficiency. Infosys Topaz used the Infosys applied AI architecture to provide an AI-first core that enables people to produce cognitive solutions that accelerate valued generation.
  • March 2023 – Salesforce, the global CRM leader, announced the debut of Einstein GPT, the world's first generative AI CRM platform that provided AI-created content at a hyper-scale across all sales, service, marketing, commerce, and IT interactions. Salesforce would use Einstein GPT to change every customer experience using generative AI. It would combine Salesforce's owned AI models with generative AI technology from a partner ecosystem and real-time data from the Salesforce data cloud, which collects, harmonizes, and integrates all of a company's customer data.

Company Products

  • Nokia Digital Assistant – Nokia Bell Labs', Nokia language model serves as the foundation for the telecom industry's first conversational AI chatbot. It has been trained on a massive collection of technical documentation, which includes technical terminology, acronyms, and specialized terms. The newest, most complex version of the conversation bot was created by mind-mapping the mental process of a telecom engineer.
  • Watsonx– IBM Watsonx Assistant is a market-leading conversational artificial intelligence technology that enables you to eliminate the friction of traditional assistance and provide outstanding experiences. It is powered by reliable large language models (LLMs). It provides automatic self-service assistance across all channels and touchpoints and seamlessly integrates with the systems that enable your organization.

Market Segmentation

  • By Technology
    • Chatbots
    • Virtual Assistance
    • Generative AI-based FAQs
    • Data Insights from Customers
  • By Deployment
    • Cloud
    • On-Premise
    • Hybrid
  • By Application
    • Finance
    • Technology Company
    • Government
    • Retail
    • Healthcare
    • Hospitality
    • Others
  • By Geography
    • North America
      • United States
      • Canada
      • Mexico
    • South America
      • Brazil
      • Argentina
      • Others
    • Europe
      • Germany
      • France
      • UK
      • Spain
      • Others
    • Middle East and Africa
      • Saudi Arabia
      • UAE
      • Israel
      • Others
    • Asia Pacific
      • China
      • Japan
      • India
      • South Korea
      • Indonesia
      • Taiwan
      • Others


1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base, and Forecast Years Timeline

1.8. Key benefits to the stakeholder


2.1. Research Design

2.2. Research Process


3.1. Key Findings

3.2. Analyst View


4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

4.5. Russia-Ukraine War Impact Analysis


5.1. Introduction

5.1.1. Chatbots Market opportunities and trends Growth prospects Geographic lucrativeness 

5.1.2. Virtual Assistance Market opportunities and trends Growth prospects Geographic lucrativeness 

5.1.3. Generative AI-based FAQs

5.1.4. Market opportunities and trends

5.1.5. Growth prospects

5.1.6. Geographic lucrativeness 

5.2. Data Insights from Customers

5.2.1. Market opportunities and trends

5.2.2. Growth prospects

5.2.3. Geographic lucrativeness 


6.1. Introduction

6.2. Cloud

6.2.1. Market opportunities and trends

6.2.2. Growth prospects

6.2.3. Geographic lucrativeness 

6.3. On-Premise

6.3.1. Market opportunities and trends

6.3.2. Growth prospects

6.3.3. Geographic lucrativeness 

6.4. Hybrid

6.4.1. Market opportunities and trends

6.4.2. Growth prospects

6.4.3. Geographic lucrativeness 


7.1. Introduction

7.2. Finance

7.2.1. Market opportunities and trends

7.2.2. Growth prospects

7.2.3. Geographic lucrativeness 

7.3. Technology company

7.3.1. Market opportunities and trends

7.3.2. Growth prospects

7.3.3. Geographic lucrativeness 

7.4. Government

7.4.1. Market opportunities and trends

7.4.2. Growth prospects

7.4.3. Geographic lucrativeness 

7.5. Retail

7.5.1. Market opportunities and trends

7.5.2. Growth prospects

7.5.3. Geographic lucrativeness 

7.6. Healthcare

7.6.1. Market opportunities and trends

7.6.2. Growth prospects

7.6.3. Geographic lucrativeness 

7.7. Hospitality

7.7.1. Market opportunities and trends

7.7.2. Growth prospects

7.7.3. Geographic lucrativeness 

7.8. Others

7.8.1. Market opportunities and trends

7.8.2. Growth prospects

7.8.3. Geographic lucrativeness 


8.1. Introduction

8.2. North America

8.2.1. By Technology

8.2.2. By Deployment

8.2.3. By Application

8.2.4. By Country United States Market Trends and Opportunities Growth Prospects Canada Market Trends and Opportunities Growth Prospects Mexico Market Trends and Opportunities Growth Prospects

8.3. South America

8.3.1. By Technology

8.3.2. By Deployment

8.3.3. By Application

8.3.4. By Country Brazil Market Trends and Opportunities Growth Prospects Argentina Market Trends and Opportunities Growth Prospects Others Market Trends and Opportunities Growth Prospects

8.4. Europe

8.4.1. By Technology

8.4.2. By Deployment

8.4.3. By Application

8.4.4. By Country Germany Market Trends and Opportunities Growth Prospects France Market Trends and Opportunities Growth Prospects UK Market Trends and Opportunities Growth Prospects Spain Market Trends and Opportunities Growth Prospects Others Market Trends and Opportunities Growth Prospects

8.5. Middle East and Africa

8.5.1. By Technology

8.5.2. By Deployment

8.5.3. By Application

8.5.4. By Country Saudi Arabia Market Trends and Opportunities Growth Prospects UAE Market Trends and Opportunities Growth Prospects Israel Market Trends and Opportunities Growth Prospects Others Market Trends and Opportunities Growth Prospects

8.6. Asia Pacific

8.6.1. By Technology

8.6.2. By Deployment

8.6.3. By Application

8.6.4. By Country

8.6.5. China Market Trends and Opportunities Growth Prospects

8.6.6. Japan Market Trends and Opportunities Growth Prospects

8.6.7. India Market Trends and Opportunities Growth Prospects

8.6.8. South Korea Market Trends and Opportunities Growth Prospects

8.6.9. Indonesia Market Trends and Opportunities Growth Prospects

8.6.10. Taiwan Market Trends and Opportunities Growth Prospects

8.6.11. Others Market Trends and Opportunities Growth Prospects


9.1. Major Players and Strategy Analysis

9.2. Market Share Analysis

9.3. Mergers, Acquisition, Agreements, and Collaborations

9.4. Competitive Dashboard


10.1. Bright Interactive Limited

10.2. Aisera

10.3. Vonage America, LLC

10.4. Nuance Communications, Inc.

10.5. NitroBots

10.6. Tiledesk

10.7. Nokia

10.8. IBM

10.9. Amelia US LLC

10.10. Zendesk

Bright Interactive Limited


Vonage America, LLC

Nuance Communications, Inc.





Amelia US LLC