Conversational AI: What It Is and How It Works

September 18, 2023
3 min

In the myriad of words that pop up every day around AI, conversational AI tends to confuse people.

Is it a chatbot? A virtual assistant? Or is it something to better understand your customers' conversation?

In this article, we’ll cover:

What is Conversational AI

This technology allows machines and computers to have conversations with humans, giving the impression of talking to a real person.

Think of Siri or Alexa - when you ask for something, you can talk like you are speaking to someone. And the technology replies just as if it were a human talking.

Conversational AI vs Traditional Chatbots

"Conversational AI" is usually used interchangeably with "chatbot."

However, they're not exactly the same thing.

Conversational AI chatbots can use technology to interact with the user and help them get the answers they need by understanding the context, identifying the sentiment, and handling more complex conversations. 

Not all chatbots use conversational AI. Most are rule-based, meaning they're designed with specific responses and can't go beyond them.

How Conversational AI works

Conversational AI combines machine learning (ML) and language models (LM).

Through machine learning, the conversational AI tool gets its intelligence.

  • Machine learning is the science of making machines learn from experience (data). It studies the data, understands connections, and develops a model. 
  • Language Models use machine learning to model the complexities of human language and enables machines to understand human language and respond accordingly.

The more conversations the tool has, the better it can become because the ML models have more data to work with.

Examples of Conversational AI

Our conversational AI solution, Crystal, is a Business Intelligence application that you can ask questions to and receive the information you're looking for based on your company data.

As an example, if you are a business user who wants to investigate sales trends, or employee performance, you can ask Crystal via text or by speaking with, and you will receive the information via chart or visualization that can easily be shared or further looked at.

3 ways you can leverage Conversational AI in your business

Conversational AI has a wide range of benefits. Here, we focus on three key benefits that will help you improve your business:

  • Productivity - conversational AI helps reduce time spent doing repetitive tasks and allows employees to focus on higher-value work and improve productivity.
  • Data-driven decision-making - conversational AI makes data more accessible to everyone in the company, helping your business to become more data-driven.
  • Data democratization - through conversational AI, everyone in the company can use business data, regardless of their technical skills. This helps reduce the gap between technology and business users, increase the confidence with data, and empower employees through impactful decisions.

Today, advancements in LLMs and Generative AI are gradually making conversational AI a second language, enabling people to talk to technology and technology to talk back to them.

It is a genuine revolution where technology runs invisibly in the back, and humans are the protagonists, always.

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