Chatbot vs conversational AI: what's the difference?

Chatbots and conversational AI are often confused but serve different purposes in digital interactions. A chatbot is a specific software interface that simulates conversation, typically through text and sometimes voice, to handle customer interactions automatically. They range from rule-based chatbots, which use decision trees and keyword triggers, to AI-powered chatbots that incorporate natural language processing for intent recognition and dynamic response generation. However, chatbots primarily produce output without completing workflows. On the other hand, conversational AI is a broader technology stack that enables more intelligent, human-like interactions across various channels and includes capabilities like natural language understanding, dialogue management, and action-taking. While all AI chatbots use conversational AI, this technology also encompasses applications such as voice assistants and AI agent systems. Chatbots are suited for simple, predictable tasks, whereas conversational AI is necessary for complex, multi-turn, and cross-channel interactions where the AI needs to take action rather than just respond. The evolving landscape sees businesses leveraging agentic AI systems that autonomously resolve interactions, providing a seamless customer experience across channels.