What is an AI chatbot?

An AI chatbot is a piece of software that interacts with a human through written language. It is often embedded in web pages or other digital applications to answer customer inquiries without the need for human agents, thus providing affordable effortless customer service.

An AI chatbot is a computer program that simulates human communication. Chatbots are frequently used in a wide variety of online situations, from customer service to sales. One of the best-known examples of Conversational AI delivered through chatbots includes eCommerce sites where bots allow customers to ask questions about a particular product and receive an instant response. As the technology underpinning AI chatbots has advanced, they have evolved from rudimentary tools to ones that can engage with consumers on a level that feels quite human and personal.


As the technology underpinning AI chatbots has advanced, they have evolved from rudimentary tools to ones that can engage with consumers on a level that feels quite human and personal.

How Do AI Chatbots Work?

Although the simplest type of chatbot, a scripted chatbot, works by providing answers to customer queries by following set rules, an AI chatbot operates slightly differently. An AI chatbot works by combining machine learning and natural language processing (NLP) to understand user intent and respond to an inquiry in a more naturalistic manner.

Unlike rules-based, scripted chatbots, AI chatbots are trained using machine-learning algorithms so they can respond correctly to open-ended questions. Although this does mean that AI chatbots can take a little longer to set up than scripted chatbots, they are able to learn from customer interactions and improve their responses.

In this sense, AI chatbots are certainly more useful for businesses in fast-moving industries where the kinds of questions posed by a customer are likely to change. An AI chatbot can use previous conversations, documentation from customer support reps, and any other relevant data to identify the language, context, and intent before providing a helpful response to a customer query - even if it doesn’t fit neatly into the pre-configured rules used by simpler bots.

Do All Chatbots Use AI?

Not all chatbots utilize AI. Some are rules-based, delivering tightly structured dialog based on user input. They are only able to recognize questions and comments when they match the keywords selected by the chatbot’s programmer. An artificial intelligence bot, on the other hand, employs machine learning and natural language processing to respond to human input even when it deviates from a pre-programmed script.

What Are the Benefits of an AI Chatbot?

When compared to a rules-based chatbot, an AI chatbot comes with several additional benefits. These include:

  • Availability - By employing an AI bot in place of a human agent, it becomes much easier for businesses to provide 24/7 availability. Whenever a consumer has an inquiry, an AI chatbot is ready to give an instant response. Based on integrated systems and databases, it can actually help the customer. A scripted chatbot can only follow the script.

  • Adaptable - Whether it’s for customer service or HR support, lead generation, or sales assistance, AI chatbots have a variety of uses. The bot can adapt to the needs of the customer.

  • Affordability - One of the main drivers behind the use of AI chatbots is their affordability. The total cost of ownership is low compared with employing additional human members of staff.

  • Customer experience - By collecting a wealth of additional data, AI chatbots can greatly improve the customer experience. By fostering more interactions, they can streamline the customer journey, deliver real-time personalization, and enable companies to collect actionable data that can be used to improve products and services. With a well set up, advanced AI-powered bot, a customer can fulfil their entire customer journey within conversations.

How to Build an AI Chatbot?

While talk of machine learning and artificial intelligence may make the idea of building your own Conversational AI chatbot sound daunting, help is available. Start by thinking carefully about what you want to achieve with your chatbot, come up with a clearly defined strategy, and then start fueling your chatbot with the data it needs.

Although it may sound challenging at first, creating a chatbot is surprisingly straightforward. Here’s why:

  • Code-free - Many chatbot creation services offer low- or no-code options so individuals with no coding experience can create their own chatbot.

  • Easy to integrate - Chatbots can be integrated into a variety of customer communication channels, including WhatsApp, Facebook Messenger, Viber, Telegram, SMS, Google RCS, and Web Chat apps.

  • Test and tweak - Once you’ve built your chatbot, you can test it on a local server with friends and colleagues to identify any potential issues. These can then be resolved before a broader rollout. Data will help you improve continuously.

What Is the Difference Between AI Chatbots and ChatGPT?

There has been a huge amount of discussion about ChatGPT and the impact that it could have on a whole range of industries. But in what ways is it similar or different from existing AI chatbots? Both ChatGPT and conversational AI chatbots can provide human-like responses to an individual’s questions, leveraging huge amounts of data and training. And both ChatGPT and some AI chatbots, including ours at CM.com, use a transformer machine learning model to provide quick and accurate responses that meet the user’s needs.

Read more: CM.com's Next Steps into Generative AI >

However, there are substantial differences between ChatGPT and an AI chatbot. ChatGPT is an AI model built using a huge amount of data - but only up to 2021 when its training was completed. It can’t be updated by a business or applied to specific channels like WhatsApp or webchat. Its behavior is also unpredictable. ChatGPT can provide some impressive answers. But it can also provide impressive-sounding - but factually incorrect- answers. Businesses don’t have control over the generative AI output that ChatGPT could be offering customers.

An AI chatbot, on the other hand, while still providing flexible and naturalistic-sounding answers, can be adapted to an organization’s specific context. Responses can also be vetted before they are sent to customers for accuracy and tone. Overall, AI chatbots come with lower levels of risk for businesses than ChatGPT.

AI Chatbot Best Practices

With all the excitement being generated by AI at the moment, it would be understandable if businesses got a little carried away. But before they dive head-first into the world of AI chatbots, it’s important that they consider a few best practices first.

First, make sure you have a clear idea of who your target audience is. Do you want your AI chatbot to support customer onboarding or to help more experienced clients with troubleshooting? The data and training that will underpin your AI chatbot will vary significantly depending on your audience. Also, think carefully about the best ways of engaging with them, as chatbots can be applied to different communication channels.

Something else to keep in mind is the user interface for your AI chatbot. Your chatbot may give extremely helpful answers, but if the UI is clunky, customers won’t use it. And remember that your AI chatbot is never the finished product. Analyze user interactions, ask for feedback, and make improvements where necessary. AI chatbots are relatively new, so it’s important you remain ready to amend your offering based on the latest developments.

To get started with AI chatbots, you can build it with CM.com's Conversational AI Cloud. Our team is available to provide the support you need to future-proof your customer engagements.

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