Artificial Intelligence (AI) Chatbot Market expected to reach USD 60.260 billion by 2030

AI Chatbot Market Trends & Forecast

According to a research study published by Knowledge Sourcing Intelligence (KSI), the artificial intelligence (AI) chatbot market will expand from USD 19.510 billion in 2025 to USD 60.260 billion in 2030 at a CAGR of 25.30% during the forecast period.

A chatbot is a type of software developed by various companies that is embedded in the user’s webpage and is specifically designed to mimic human conversation over text. An AI chatbot is an upgraded version of a chatbot that includes the integration of artificial intelligence (AI), which can simulate human-like customer service interaction with the customer. It includes features like machine learning (ML) and natural language processing (NLP).

One of the major drivers for the growth of the AI chatbot market is the increasing usage of internet services and an overall increase in internet users creates an optimal opportunity for companies worldwide to attract more customers. Companies with a high volume of customer base deploy chatbots and AI chatbots to provide fast and better customer service, understand and solve customer queries. This increase in brand revenue reflects the growing adoption across industries, including education. The world has witnessed the introduction of various online educators like TeachAway and Udemy. These companies use AI chatbots to understand student needs and create efficient programs for educators.

AI Chatbot Market Highlights

• The software segment is expected to attain a major market share by 2030 in the components driven by its increasing necessity for scalable AI-enhanced platforms and growing automation for supporting customer services. Additionally, the rise of generative AI and its ability to offer multilingual, personalized responses is fueling segment expansion.
• The cloud is estimated to hold the largest share in the deployment segment during the projected period due to its flexibility across industries. It offers scalability, data sovereignty, and remote work accessibility, propelling cloud-based AI chatbot adoption.
• The retail segment dominates the industry vertical due to high query volumes, order tracking, and personalization demands. The surge in e-commerce platforms globally is driving the need for AI-powered virtual assistants.
• North America leads the AI chatbot market due to a robust tech ecosystem, especially in the United States and Canada. Heavy investments in AI, labor cost pressures, and early adoption of automation are key growth enablers.

Report Coverage:

Report Metric	Details
AI Chatbot Market Size in 2025	US$19.510 billion
AI Chatbot Market Size in 2030	US$60.260 billion
Growth Rate	CAGR of 25.30%
Drivers	Rise of Chatbots in the Education Industry Growing Industrialization
Restraints	Data privacy, security & regulatory compliance Lack of Accuracy
Segmentation	Component Deployment Industry Vertical Geography
List of Major Companies in AI Chatbot Market	Creative Virtual Ltd. Avaamo Inc. Amazon Web Services, Inc. Oracle LiveChat, Inc.

AI Chatbot Market Growth Drivers and Restraints

Growth Drivers:

• Rise of Chatbots in the Education Industry: AI chatbots enhance learner engagement on platforms like Duolingo and Mondly by enabling real-time interaction with minimal human involvement. The booming online education sector — led by Udemy and Coursera — drives demand for intelligent, scalable customer support solutions.
• Growing Industrialization: Sectors like BFSI, healthcare, and retail are rapidly adopting AI chatbots. LiveChat reported revenue growth from US$10.25 million in 2021 to US$11.166 million in 2022, reflecting strong enterprise demand for AI-driven customer engagement tools.

Restraints:

• Data Privacy, Security & Regulatory Compliance: AI chatbots process sensitive user data, making them vulnerable to breaches and subject to strict regulations like GDPR and CCPA, which can slow adoption.
• Lack of Accuracy: Large language models may generate plausible but incorrect responses, reducing trust in high-stakes domains like healthcare and finance, often requiring human oversight.

AI Chatbot Market Key Development

• Product Launch: In September 2025, PA Turnpike launched Miles, an AI-powered customer service chatbot offering real-time virtual assistance to enhance traveler experience on its website.
• Product Launch: In August 2025, Amazon introduced a generative AI-enabled conversational shopping assistant in India, delivering personalized product recommendations for a seamless shopping journey.

AI Chatbot Market Segmentation

Knowledge Sourcing Intelligence has segmented the AI Chatbot Market based on component, deployment, industry vertical, and region:

• AI Chatbot Market, By Component
  • Hardware
  • Software and Services
• AI Chatbot Market, By Deployment
  • Cloud
  • On-Premises
• AI Chatbot Market, By Industry Vertical
  • BFSI
  • Media & Entertainment
  • Education
  • Retail
  • Healthcare
  • Others
• AI Chatbot Market, By Region
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • United Kingdom
    • Germany
    • France
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Others

AI Chatbot Market Key Players

• IBM
• Nuance Communications, Inc.
• eGain Corporation
• Microsoft Corporation
• Google, Inc. (Alphabet Inc.)
• Creative Virtual Ltd.
• Avaamo Inc.
• Amazon Web Services, Inc.
• Oracle
• LiveChat, Inc.