How AI Chatbots Work and Why They Matter in 2025

Artificial intelligence (AI) is here to stay, and it’s making leaps and bounds in how we optimize processes.

AI chatbots could be another solution that will make you think, “Wow, why didn’t I think of this before?”

But what is an AI Chatbot? Is it the same as a regular chatbot?

AI chatbot, conversational AI, generative AI, ChatGPT… What are they all?

With an endless variety of terms and technologies emerging in the world of artificial intelligence (AI), it can be difficult to distinguish one from another.

You may have heard some or all of these terms before. But to help you become more knowledgeable in the field, here are some brief glossaries.

1. AI Chatbots

AI chatbots are software programs that can perform human-like conversations through text or voice.

These bots are different from regular chatbots because they use AI algorithms to understand user queries and respond appropriately.

Their purpose is to provide information, provide assistance, or engage in regular conversations. For example, many businesses are benefiting from enterprise chatbots for their daily operations.

That’s why AI chatbots are often used in customer service and support systems across industries to automate tasks, provide guidance, or entertain users.

2. Conversational AI

This is a term that encompasses all types of AI technologies that allow for seamless interactions between humans and machines.

In fact, conversational AI is a term that goes beyond chatbots. The term also includes voice assistants, virtual agents, and interfaces.

3. Generative AI

Generative AI is a technology designed to generate content such as text, images, and music. These AI language models are trained on large amounts of data and learn patterns to generate new content.

As we know, ChatGPT is an application of generative AI focused on text generation, created by OpenAI.

What is an AI Chatbot?

To better understand AI chatbots, it is important to understand that all AI chatbots are chatbots, and not all chatbots are AI chatbots.

As mentioned, AI chatbots are software programs that understand human speech or text based on Natural Language Processing (NLP).

This means that an AI chatbot can understand the intent of a user’s question and provide the most appropriate answer.

With the help of machine learning, this AI technology can mimic human-like behaviors in areas such as problem-solving, creative thinking, and self-reflection.

For example, voice cloning can enhance the user experience and make interactions with chatbots more natural and engaging. This is because they can not only understand text but also produce human-like speech.

Furthermore, as more interactions occur, they can self-reflect and improve to solve bigger problems.

What are the benefits of AI Chatbots?

✅ Efficient Customer Service

One of the main benefits of AI Chatbots is that businesses love to be more efficient in answering customer queries. Accurate personal service does not always require human support.

✅ Customer Data Collection and Learning

By taking advantage of live chat logs that occur on your website, AI bots can learn and respond based on real conversations that customers have had in the past.

When you train AI Chatbots based on customer conversation logs, your bots become more accurate. Finding patterns in past conversations is a good indication of what answers customers are often looking for.

✅ 24/7 Support

Another benefit of AI Chatbots is that they are available 24 hours a day and can respond to customers immediately. You can provide personalized answers at any time, and in some cases, even in multiple languages.

Once they start collecting data, AI chatbots require little manual maintenance.

So how do you ensure your chatbot is successful?

All you need to do is follow best practices for your chatbot and optimize your bots as you use them.

Types of AI Chatbots and Their Uses

As we have seen, there are many different types of AI chatbots and different areas where they can be used.

One popular type of AI chatbot is the conversational AI chatbot. It uses AI models like GPT-4 to generate text and can converse in real-time. These chatbots can be used in customer service to answer customer queries quickly and efficiently.

Another type of AI chatbot is the marketing automation chatbot. It uses templates and workflow automation to streamline marketing processes. These chatbots can instruct users to perform specific actions or provide personalized recommendations based on user input.

Some businesses opt for custom AI chatbots that meet their specific needs.

These chatbots have advanced AI features and capabilities, such as the ability to understand complex conversations using natural language processing (NLP) and provide more personalized answers. These chatbots are often used as virtual assistants to help users with complex tasks.

In general, AI chatbots are tools that can be used in a wide range of industries and applications, from customer service to marketing automation.

How to Build an AI Chatbot?

Building the best AI chatbot for your business has become easier than ever with the help of a chatbot builder.

While there are many platforms out there, you should be clear about your preferences and needs.

You should also compare AI chatbot platforms based on their ease of use, integrations, reporting capabilities, and other factors.

If you are looking for a platform that is both technologically advanced and reasonably priced, you may want to consider giosg. giosg has a user-friendly interface and a number of features that make building an AI chatbot a breeze. It is specifically designed for large enterprises.

Also Read: Google AI Mode Explained: How It Impacts Your Website Traffic