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Is there really reason to expect a bright future for chatbots? The widely varying forecasts and promises of experts and marketers tend to obscure the situation. But in general, there is strong confidence in the potential and opportunities of the chatbot industry.

Chatbots aren’t yet good enough to fool us into thinking they are real people. But they are definitely experiencing a boom. Companies use them all the time for customer service, marketing and lead generation. There are even chatbots out there that do nothing but entertain and engage people.

The chatbot market is currently growing at a rate of 24.3%, and is expected to reach a volume of 1.25 billion USD by 2025. Propelled by machine learning, the same technology that is pushing back the limits in practically every other field, the triumphant march of chatbots shows absolutely no signs of stopping or even slowing. Here are the key industry trends this year:

Chatbots are going mainstream.

Chatbots are poised to emerge from the early adopter stage and become indispensable for businesses. 2018 is the year in which AI has gone mainstream, and chatbots are part of the package.

Globally, we are nearing the point where using Chatbots for customer service is the rule rather than the exception. And it’s very likely that they will soon spread beyond these applications.

Chatbots are getting better at conversing

Natural language is the name of the game. Machine learning and other technologies are driving rapid advances in natural language processing. AI applications are getting much better at understanding us and identifying our intentions.

For Chatbots, this signals the emergence of conversational capabilities. In addition to being better at understanding what we’re saying, they are also more like to respond in a way we can relate to. Bots increasingly seem humanlike, and this is going greatly increase their value and performance.

Chatbots for gathering data

The better Chatbots get at mimicking human language, the easier it will also be for people to give them important information. It still takes a lot of processing for them to analyze it and derive insights. But one of the major trends this year is automating data collection from Chatbots and facilitating its analysis.

New regulations like the EU’s GDPR are making it more complicated to gather and process data. But this will remain a major part of many business models. We expect that the chatbot industry will continue advancing toward better data collection while finding ways to avoid offending regulators.