With AI becoming a part of our everyday lives, AI chatbots are no longer a new term for individuals and businesses. In fact, there is hardly any business today that is not using a chatbot, especially to render support services. Like AI chatbots, a new term that is gaining popularity is “AI Agents.” While both these terms may seem similar, the reality is they have a lot of differences, and this blog is going to highlight them all.
Yes, here we have explained all the differences between AI agents and AI chatbots. Before we read more about AI agents vs. AI chatbots, let’s learn some fundamentals of both to understand what exactly they are.
AI Agents Vs. AI Chatbots: Definition
An AI chatbot is a software program that is designed to interact with users in engaging and natural-like conversations to offer information and provide answers to frequently asked questions. Based on the functionality, the chatbot accepts text and voice-based inputs and generates output in the requested format. To generate or produce output, the chatbot is trained on specific data.
AI chatbot example: A customer support chatbot integrated into a company’s website to automatically answer frequently asked questions by users/customers.
On the contrary, AI agents not only perform tasks, but they have the ability to make decisions. In simple words, it can think and take actions on its own based on its surroundings or environment.
AI agent example: An AI agent performing a company’s supply chain operations or automatically trade stocks on the stock market by analyzing trends and current market.
Read on to know other differences between AI Agents and AI Chatbots.
AI Agents Vs. AI Chatbots: Market Statistics
Let’s check out market size, trends, and other statistics associated with AI Agents and AI Chatbots:
AI Chatbots
- The global market size for AI chatbots is expected to grow at a compound annual growth rate of 23.3% between 2025 and 2030 to reach a valuation of USD 27.27 billion.
- Increasing adoption of chatbots in businesses from diverse industries and delivering personalized experiences to customers are the two major driving forces behind this growth.
AI Agents
- The AI agent market size is projected to expand at a CAGR of 45.1% between 2024 and 2030, reaching a valuation of approximately $52.27 billion.
- Rising demand for automation, increasing adoption and advancements in NLPs, and prioritization of personalized customer experience are some of the driving forces behind the growth of AI agents.
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AI Agent Versus AI Chatbots: How Do They Work
Check out the difference between AI agents and AI chatbots working or functioning:
Step-by-step working of AI chatbots
- A User provides input via text or voice commands
- The chatbot leverages its NLU engine to understand the intent of the query and identify key information within the input.
- The chatbot then looks up pre-defined rules, conversational flows, and other aspects to figure out the appropriate response to that query.
- In this step, the chatbot generates a response in an easy-to-understand and concise language.
Read More: How ChatBots can be implemented in various Industries
Step-by-step working of AI agents
- The AI agent observes its environment through sensors equipped in a physical facility and data inputs from a database or API.
- The artificial intelligence agent then automatically defines the goals it wants to achieve.
- Leveraging planning algorithms or ML models, the AI agent decides the action to be taken within that environment to attain the defined goals. These actions could be anything from performing physical tasks by robots or virtual tasks such as scheduling a call and sending an email to reply.
- It also predicts the outcomes of its actions. After this, the agent carefully analyzes the feedback of its actions to use it for self-improvement.
Explore More: Types of AI Agents: Use Cases, Benefits, and Challenges
AI Agents Vs. AI Chatbots
Let’s check out the differences between AI agents and AI chatbots:
AI Agent Vs. AI Chatbots: Detailed Use Cases
Check out the differences between AI agents and AI chatbots’ use cases:
AI Chatbots Use Cases
- Customer Service
Chatbots are perfect for customer support services. They can efficiently handle user queries to frequently asked questions, provide support, resolve simple issues, and direct customers to the appropriate resources.
You might like: How Chatbots Reduce the Costs of Customer Services
- Lead Generation
Chatbots can be used in sales. AI-powered chatbots can ask pre-defined questions, collect contact information, and classify potential customers. It can save time and cost significantly for the businesses or the company.
- Information Retrieval
Another amazing use case of AI chatbots is offering quick access to information from a knowledge base or database. It can be used to prepare FAQs, help a company’s personnel understand the product, and prepare documentation of the product.
- Task Automation
Unlike AI agents, AI chatbots can be used for automating simple tasks, such as setting reminders, scheduling appointments, and others.
- Personal Assistants
An AI chatbot can also become a personal assistant to perform tasks like playing music, providing weather updates, setting alarms, and more.
- Internal Help Desk
An AI chatbot can assist a company’s employees with IT issues and HR questions or get answers to other internal inquiries.
AI Agent Use Cases
- Personalized Recommendations
AI agents have the capability to evaluate user data to provide tailored recommendations for products, content, or services. The best example of it is Netflix or Amazon suggesting movies or web series to its users.
Read More: How to Develop an AI-based Recommendation System?
- Autonomous Driving
AI agents can be used in self-driving cars. They can perceive inputs from surroundings and sensors to get inputs and make driving-related decisions.
- Robotic Process Automation
AI agents can automate repetitive and redundant tasks and rule-based tasks in various business operations, including processing invoices, generating responses, and more.
- Supply Chain Management
AI agents can optimize logistics-related processes, predict supply chain demands, and automatically manage inventory levels to place new orders (in case of stockouts) without any manual intervention.
Explore More: AI in Supply Chain Management: Navigating the Future of Logistics
- Financial Trading
AI agents can automatically analyze market and upcoming trends to build trading strategies and do financial trading.
- Advanced-Level Personal Assistant
While AI chatbots can also perform simple tasks, AI agents can perform advanced-level tasks such as prioritizing operations based on urgency, managing schedules, booking travel, and anticipating user needs. In short, they can be a digital version of you.
Also Read: How AI Personal Assistants Drives Enterprise Growth?
- Threat Detection
AI agents can detect and respond to security threats to ensure complete protection of your system and accounts.
In this AI agent vs. AI chatbots blog, the aforementioned are the generic use cases. If you want a chatbot or AI agent to be developed as per your specific use case, connect with a reliable and trusted AI chatbot development company or AI agent development company.
AI Agents vs. AI Chatbots: Examples
We have briefly mentioned both AI agents and AI chatbots’ examples earlier as well, let’s read about them in detail for a better understanding and complete clarity:
AI Chatbot Examples
- Customer Service Chatbots
It is the most popular type of chatbot that is capable of handling simple inquiries, providing answers to FAQs, and helping users with basic processes, like adding a payment method to their account, changing profile information, and more. We all have seen such chatbots on most websites and applications. Yes, we are talking about those pop-ups saying, “How may I help you,” or “Ask me anything.”
Read More: How AI-Powered Chatbots Improve Customer Service in Retail?
- Voice Assistants
Voice assistants are also a type of chatbot that can respond to users’ queries and become a helping hand for them by performing operations on their voice commands. Siri and Alexa are two popular examples of voice assistants. They work on pre-programmed responses.
Check Out: How to Build an AI Chatbot Like Replika? A Comprehensive Guide
AI Agent Examples
- Self-Driving Cars
Driverless cars are a perfect and easiest example that can help you understand what’s an AI agent and how it is different from an AI chatbot. These cars don’t require any driver, they have the ability to perceive their surroundings, make decisions about navigation, detect and avoid obstacles, and execute required actions such as stopping, accelerating, and more. They don’t require pre-input for any unpredictable situations like road diversions.
- Personalized Recommendation Engines
A personalized recommendation engine is a perfect example of an AI agent. The popular companies Netflix and Amazon use such an AI agent to display personalized recommendations to their users or customers. The AI agents analyze your past interactions and predict your interests and preferences to suggest shows/movies or products you may like.
You might also be interested in: How to Create an AI Agent? Top Use Cases, Benefits, and Examples
AI Agent or AI Chatbot: What to Choose
Selecting from an AI agent or an AI chatbot depends totally on your particular requirements. Check out the below points to get clarity on which of these two would suit you best.
Select an AI Chatbot in the Following Scenarios:
- If you need a simple chatbot that can answer frequently asked questions, provide basic information, and help users with performing simple operations.
- If you wish to render round-the-clock customer support services and free up your human support professionals for other strategic tasks.
- If you want an automated bot to automate simple operations and perform lead generation-related tasks.
- An AI-powered bot that can be developed faster.
- You want a chatbot that focuses on delivering natural and human-like conversations.
Choose an AI in the Following Scenarios:
- You need an automated agent that can perform complex actions without constant human intervention.
- You need an agent that can identify and address issues before they escalate.
- If you need an AI agent that is capable of automatically analyzing data, evaluating options, and making informed choices.
- If you wish to deliver highly personalized experiences with tailored recommendations and suggestions about products and services.
- If you wish to optimize processes and streamline workflows to achieve better efficiency and accuracy.
- If you want an AI agent to handle unpredictable situations and automatically adapt to changing situations to make real-time adjustments.
Bonus Content
Before you invest either in an AI agent or an AI chatbot, here are some points to consider:
- Define your goals, including the problem you want to solve with it.
- Determine the complexity level of the task you want to solve with a Chatbot or Agent.
- Focus on the level of autonomy, whether you want a bot that can independently perform operations or requires user inputs.
- Determine the level of personalization you need.
- Consider your budget and timelines, as chatbots are relatively inexpensive than AI agents.
Conclusion
AI chatbots and AI agents have both revolutionized the way businesses manage their operations and offer services to their customers. While both are powered by artificial intelligence, it is essential to know the difference between AI agents and AI chatbots to choose the one for your business.
This AI Chabots Vs. AI Agents guide simplifies all those differences in an easy-to-understand way. By going through this blog, you can understand how AI agents and AI chatbots differ in terms of use cases, functionality, working, and other aspects.