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How chatbots have evolved with data and AI

Adam Naor
last edited on
October 11, 2023
7-8 mins

Table of contents

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chatbot evolution with data

One of the most commonly used tools for integrating virtual assistance is chatbots. Many site administrators use these chatbots to mediate access to data and to carry out generic interactions with users.

Businesses and companies are getting a lot of attention from users and virtual assistants alike, as these entities can help to enhance customer care software packages minimize customer service center costs, and help management engage with many customers at a single time.

Big data analytics is the process of processing, storing and analyzing massive data sets that can serve as useful business information to find trends and unknown associations concealed in the data, such as usage statistics and consumer preferences.

In the modern world, data analytics is everywhere: it helps inform the technologies we use, how software is designed, and the ways goods are made.

Over the years, the way companies connect with their customers has fundamentally changed, from going door to door to the newest digital technology which enables surveying users online and at scale.

Big Data is based on volume, speed, and variety, as applied to chatbots. Chatbots are improving at exponential speeds because data is creating virtuous feedback loops within the software itself.

These foundations are what makes Big Data different from other technologies for data research and knowledge processing. A chatbot or conversational agent is a program that can use natural language to interact with a human being and is software that leverages Big Data to communicate with humans at scale. Most importantly the feedback from the conversations creates a flywheel: as the human becomes more engaged and uses the chatbot more frequently, the software learns. And in that process it improves. Which over time makes the product better and more relevant.

The simulation of conversation is one of the basic tasks in artificial intelligence and natural language processing.

Bots are an important part of the website of any brand because they quickly, effectively, and systematically automate contact between brands and their potential customers. But what exactly are bots, and how have they been changing over the years? How do they use computer science to improve and iterate? How does natural language processing lead to better computational experiences for end users?

Since the beginning of artificial intelligence, modeling has been the hardest challenge to create a good chatbot. Yet models are getting better.

Let’s dig deeper.

What are chatbots and how does data impact the development and utility of chatbots?

AI and machine learning-powered chatbots allow your website to help as many customers as possible at once by answering their inquiries automatically without any need for human intervention. These inquiries can be “what is your pricing?” or “what is your address?” or even “I would like to speak to a human”. A chatbot can resolve these questions or commands while using your own brand voice with FAQs or programming.

Today, most large-scale conversational AI agents (such as Alexa, Siri, or Google Assistant) are designed to train the various components of the system using manually annotated data. Usually, by manually transcribing and annotating data, the precision of the ML models in these components is improved.

Intelligent chatbots understand questions no matter how they are phrased through a continuous learning process before they can correctly analyze and respond to them. Chatbots can be the best way to stay connected with customers and support them with anything they need, with the help of a bot creator.

In open domain discourse, context modelling plays a pivotal role. Current works either use heuristic techniques or, with an encoder-decoder system, learn context modeling and response generation together. 

How do chatbots leverage data and what are neural dialogue models?

Due to their foundational success in simulating and generalizing human conversations, neural dialogue models have been widely adopted in various chatbot apps. There is, however, a dark side to these models. Due to the weakness of some applied neural networks users can exploit a neural dialogue model.

There are a couple of different types of chatbots that can vary in function but ultimately serve the same purpose and they are:


Flow or rules-based chatbots

These chatbots follow a tree-based model where certain pathways are designed using a decision tree by a bot developer. That means the chatbot will guide the user through a pre-existing journey through which they will resolve the pathways developed only.

That means that this chatbot will not give the user any options for further information they may need. This approach may be slightly limiting to the user but it can also lead them to make a purchase through easy and fast steps. 


AI chatbots

A chatbot only reflects the natural evolution of a query answer mechanism that leverages natural language processing from a technical point of view (NLP). One of the most typical examples of natural language processing used in the end-use applications of different enterprises is to formulate answers to questions in natural language.

AI chatbots are different since they will learn how to answer a user’s question following a preparation period by a bot designer. After their training, they are able to offer information that matches the inquiries made by the user. 

This kind of chatbot avatar can answer questions even if they phrased differently providing accurate responses to users. The more it learns and it is trained, the better the experience it can give users. 

The evolution of chatbots: data and Natural Language Processing Heuristics to Accelerate Performance

With the development of chatbots for Deep Learning and NLP, they have become increasingly popular. The hype for chatbots is already strong and for the next few years it will be growing. The pace of these technologies is being pioneered by startups and major tech companies. In addition, amble venture financing is supporting developments in this space.

For example, chatbots were first brought into the mainstream by Apple’s Siri and Google’s Google Assistant. These offered the first form of conversational bots that can perform commands using voice recognition. Facebook’s Messenger app was the next in line to introduce this revolutionary technology to the public. 

Chatbots use text-based interactions to communicate with users; personal assistants take direct speech commands from their users on smartphones such as Google Assistant; and voice-controlled devices such as Amazon Echo use voice as their only input mode.

From that point forward, chatbots have become a staple of the Marketing and Sales world with a presence on websites, mobile applications, social media, and more. Their purposes varied but they mostly have the same goal which is to communicate effectively with customers online.

Chatbots may seem limited in application since they are mainly used for customer service, however, they have actually evolved significantly throughout the years to involve much more complicated functions. 

Beyond a programmed set of reactions, they have evolved. Not only do they provide assistance, but they can also be used to drive interactions, start a conversation, or promote a service or product. I recently had a chatbot advise on the specifics of a black desk which helped me spend more time on a website and increased my familiarity with a specific brand. Needless to say, the experience was a positive one and profitable for the company that deployed the technology. In any language or sound, chatbots can be programmed to talk, meaning they can be formal or conversational or whatever is required to fit the voice of a brand.


Integration and bots: data and human centric analysis

By some estimates, by 2021, the chatbot market size is projected to hit USD 3,172 million across all the industry verticals. Part of this increase would be related to technical changes. Part of this progress will be powered by computing. But integration will be guided by the final stage of this growth (APIs and software connections).

One of the most impressive features of chatbots nowadays is their integration abilities. 

By integrating with other channels or archived data, they create a personalized experience. This leads to responses matching the background of the customer with the website or company. This form of integration guarantees accurate responses and removes needless introductions, making a chatbot so knowledgeable that it understands who the user is as well as their previous experience with the website.


Chatbot’s sentiment analysis as derived from natural language processing, text analysis, computational linguistics

This feature can help the chatbot find clues of the user’s frustration. The bot can then refer the user to a representative or follow a different line of replies.

Chatbots used to have minimal capabilities and provide standard responses in the first phases of development. Chatbots have become more powerful with the developments in AI and machine learning and have introduced new features that have helped enhance the user experience. And one of these recent features that brings user experience to the next level is the measurement of sentiment.

Sentiment analysis helps a chatbot to understand the emotions and state of mind of the users by analyzing their input text or voice. This analysis enables chatbots to better steer conversations and deliver the right responses. Sentiment analysis is also playing a key role in driving user adoption for enterprise chatbots.

All interactions with a chatbot are recorded in its system which ensures no vital information ever gets lost. This is especially helpful to the CRM, customer service, or sales teams in later speaking to the user. As they will know their state prior to contacting them, the referral is a much easier and smoother experience.

How the Chatbots benefit from applied data at scale?


Instant communication

Sentiment analysis refers to the use of natural language processing to systematically define, isolate, measure, and analyze affective states and subjective knowledge (also known as opinion mining or emotion AI). Chatbots exploit sentiment analysis (as noted above) to interact on a scale with individuals and their large spectrum of feelings.

Whenever a user asks a question on your platform, they get an instantaneous reply. That is the power of chatbots that allows you to answer and resolve any inquiries brought forth by users using knowledge bases and FAQs. Chatbots can even send back resources, blog posts, or more to help answer the user’s question in more detail. So with answers that include links, photos, text, or more, the user will get all the information they requested in an instant.

Building a bot is often assumed to involve just building the conversation flow. It is the fun part! It’s when everything comes to life. However, it can be a scary process.

The first thing to understand is that it’s ok to use multiple skills to complete one task. One skill doesn’t have to equal one full process. It can be a good solution to create one “mega-skill” whose job is to dispatch the user input to the correct skill.

Some chatbot services even offer suggestions to users on what they could ask while they are typing in order to make it easier for them to get the information they need. 


No need for a large team of operatives

Chatbots offer automated replies all day long to multiple users at once which means that you don’t have to invest in a whole team of representatives. For a subscription fee to a chatbot service, you can communicate with users with your own brand voice and the instant automation of bots. 

No human intervention is needed when you have already set up your chatbot so you can cut down on your expenses. A recommender system aims to predict the preference for an item of a target user. Mainstream recommender systems work on explicit data sets which help organizations scale.

Data and AI have helped chatbots evolve and scale, which drives down marginal costs.


24/7 Support

Even if you have a team in place, they can be unavailable at some hours of the day. Chatbots can let your users know when your team will be back or answer any pressing questions that could make or break a purchase. A chatbot can definitely fill in for your team when they are not around so that the user isn’t left hanging without any response. 


Better service over time

One of the many benefits of chatbots is that they use AI to become more intelligent over time. Chatbots can learn to better answer questions as it accumulates more experience so it provides more accurate and relevant replies.  

Similarly, it can stop answering with certain responses if they were marked unhelpful by a user. A chatbot can recognize if the user is frustrated so they alter their replies in the future as to not reach the same conclusion.

In addition, a huge part of a chatbot’s intelligence is its training by a bot developer that has knowledge of what their users would like to know and how to answer it efficiently.


Customized responses

Even if your users have the same question, the same answer might not satisfy them since they come from different backgrounds with different needs. By understanding each user’s background, the chatbot can better customize the response to their question according to their potential need. 

Not only that but also based on factors such as consumer spending, business type, location, and more, you have the power to choose how the bot reacts to each question. With responses that are hyper-targeted to their requirements, you can solve the problems of any user on your website. The applications are broad. For example, Data Center Infrastructure Management firms are leveraging DCIM software to automate data center operations through chatbots between hosts and controllers. The same is true with digital online higher education. These organizations are leveraging chat bots to help with enrollment and academic assessments. 


Expose invisible leads

Users online are always looking for convenience. With a chatbot ready to answer all of their questions without needing to browse too much, users can progress much easier to the purchase phase. Invisible leads have a much higher chance of exposing themselves and revealing their data by interacting with a chatbot.

Since the chatbot saves conversations, your customer service or sales team can always review them and contact potential needs to make sure their questions were answered. They can also get a pretty comprehensive idea of the user’s position in the decision-making funnel. Thus, they can guide them in a conversion direction.


Always stay on brand

AI chatbots will help you create an experience that fits your brand voice and tone. Since you are in charge of the speech and language used in the responses of your bot, you can always stay on brand and give off a consistent vibe on your website. Because your chatbot is all automated, there will never be any accidental misunderstandings or late replies. 

Chatbots are a great tool for brands and companies to connect to their customers as well as attract leads to further stages of the sales funnel. They can be super productive when it comes to conversions or else you are not doing it right. AI Chatbots have evolved and will continue to evolve for better, more wholesome experiences. They will enter our phones, homes, and maybe further beyond our current comprehension. So, definitely keep an eye out for bots whether you are talking to Siri or asking for support while you are ordering food or searching for an online ordering system, you never know what it will do next.


The commercial application of chatbots is expanding, and knowing how to leverage data to make these bots better at conveying and scaling information is important. The way brands communicate with their customers has changed drastically over the years and chatbots are accelerating these trends

The chatbot applications are broad and go beyond consumer technology tools. 

The field is evolving. It is a space worthy of optimism.

Adam Naor

Founder of, a website that helps people work from home.

Adam has 10 years of experience working for various technology companies, including Google. He decided to share his experiences and passion for remote work on in order to help others work from home successfully.

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