Business

Chatbot

A chatbot is a software program that conducts text or voice conversations with users, either by following scripted decision trees or, in modern implementations, by generating free-form responses using a large language model.

A chatbot is a conversational software agent designed to simulate dialogue with human users, typically through a text interface on a website, messaging platform, or mobile application. The concept dates to the 1960s — ELIZA, developed at MIT by Joseph Weizenbaum and described in a 1966 paper, used simple pattern-matching to simulate a psychotherapist — but the term gained widespread use with consumer messaging apps in the 2010s, when businesses began deploying rule-based bots on platforms such as Facebook Messenger and WhatsApp. Early chatbots matched user inputs to predefined patterns and returned scripted responses or routed users through decision trees, making them effective for narrow tasks such as flight status lookups but brittle outside their intended scope.

Modern chatbots are predominantly powered by large language models (LLMs), which generate responses token by token based on learned statistical patterns rather than hard-coded rules. This shift, accelerated by OpenAI's release of ChatGPT in November 2022, enabled chatbots to handle open-ended questions, maintain multi-turn context, switch topics fluidly, and produce coherent long-form text. Retrieval-augmented generation (RAG) pipelines are commonly added to ground responses in specific document sets, reducing hallucination in enterprise deployments. Voice interfaces pair a speech-to-text layer — such as OpenAI's Whisper model — with the LLM and a text-to-speech synthesizer.

Chatbots matter because they handle high volumes of routine interactions at a marginal cost far below that of human agents, making them a standard first-response layer in customer service. ChatGPT reached approximately 100 million monthly active users within two months of its November 2022 launch — the fastest consumer application adoption on record at the time — demonstrating latent demand for accessible conversational AI. Enterprise deployments commonly report deflection rates of 40–70% for tier-1 support queries, though independent audits of such figures are limited.

As of mid-2026, the boundary between "chatbot" and general AI assistant has blurred considerably. Products such as ChatGPT, Claude, and Gemini are marketed as AI assistants rather than chatbots, reflecting capabilities — image analysis, code execution, tool use, and long-context reasoning — that far exceed traditional chatbot functionality. The term "chatbot" in industry usage now most often denotes narrower, task-specific deployments, particularly in customer service, lead generation, and internal IT helpdesks, while the broader category of conversational AI encompasses everything from simple FAQ bots to general-purpose assistants with multi-modal capabilities.

Example

An e-commerce company deployed an LLM-powered chatbot on its website that handles order tracking, return requests, and product recommendations, resolving a substantial share of inbound customer inquiries without routing them to a human agent.

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