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According to the latest market research study published by P&S Intelligence, the U.S. chatbots software market reached USD 1,107.9 million in 2024 and is projected to soar to USD 6,232.5 million by 2032, driven by an estimated CAGR of 24.3% through 2032.

This impressive growth is fuelled by businesses embracing automation to meet rising customer expectations for 24/7 support, with over 75% of U.S. customer support operations already automated and nearly 80% of companies planning further investment in AI-driven support.

Smartphone adoption and social media usage surge demand for natural-language chatbots. Integration of advanced technologies such as machine learning (ML) and AI—epitomized by IBM’s Watson Assistant—is enhancing conversational depth, context awareness, and personalized responses, translating into elevated customer satisfaction and operational efficiencies.

Key Insights

• The Software segment accounted for 70% of the market in 2024, highlighting strong demand for chatbot solutions on websites, mobile apps, and social media platforms.
• Services emerged as the fastest-growing category, offering customization, integration, and ongoing support to enrich chatbot deployments.
• Contact centers dominated applications with a 45% market share in 2024, thanks to chatbots improving customer satisfaction by delivering instant, cost-effective query resolution and reducing reliance on human agents.
• The mobile platform segment is expanding swiftly, mirroring increased consumer engagement via apps and messaging channels.
• Web-based interfaces held a 60% share, owing to seamless integration with websites, real-time response capabilities, and compatibility with CRM systems.
• Messenger/third-party-based chatbots are the fastest-growing interface, leveraging platforms like WhatsApp and Facebook Messenger to reach users in their preferred environments.
• Cloud deployment led the market (both largest share and highest CAGR at 24.6%), offering rapid scalability, cost-efficiency, and easy integration—beneficial for industries like retail, BFSI, healthcare, and more.
• In 2024, the retail and e‑commerce vertical generated USD 387.7 million, becoming the top industry driver. The surge in online sales (USD 308.9 billion in Q4) has pushed demand for automated customer support for order processing and returns.
• The Western U.S. held a commanding 50% market share in 2024, powered by Silicon Valley’s concentration of tech innovation and rapid adoption across IT, finance, healthcare, and retail sectors.
• Market structure is fragmented, with major global players—including Google, Microsoft, IBM, AWS, Meta, Salesforce, Oracle, ServiceNow, Nuance, [24]7.ai, Kore.ai, and OpenAI—competing alongside agile niche providers.
• Low entry barriers enable dynamic competition and constant innovation. New entrants are leveraging AI/ML to introduce differentiated solutions tailored to specific applications or industries.
• Automation and ML advances are key market drivers—over 70% of customers trust AI for resolving their queries, and AI-powered chatbots can save agents more than 2 hours daily, significantly boosting productivity.