What is conversational AI?
Quick answer
Conversational AI is the umbrella term for AI that talks with people in a back-and-forth way, by text or by voice. It covers website chat assistants, AI phone receptionists and assistants like ChatGPT. Today most of it is built on large language models, plus speech-to-text and text-to-speech for voice.
Last updated
Take the free module →Module 5 of the free Voice AI Jump Start course, about 9 minutes. No account needed.
Updated · By Robert Breen
Why it matters for a small business
Older chatbots followed scripts and menus, and broke as soon as someone phrased a question differently. Language models made conversational AI handle free-form questions, follow-ups and changes of topic, which is why it now answers phones and website chats for small businesses.
The flexibility is also the risk. A conversational AI will try to answer anything, so you limit what it may answer from, tell it what to do when it doesn't know, and say plainly to people that they are talking to AI.
Disclosure is part of the job. Callers and website visitors should know they are talking to AI, and on calls they should also be told about recording. Many platforms, including ElevenLabs, set out their own disclosure requirements.
In a real lesson: Give Your Voice Agent Knowledge: A Price List and FAQ in ElevenLabs
In Give Your Voice Agent Knowledge, Riley, the Cedar Creek Plumbing after-hours agent, gets a price list and FAQ, and its system prompt says to quote prices exactly as written and say "I don't have a price for that" instead of guessing.
Then you test it like a real conversation: the after-hours price (it quotes the $189 call-out and $165 drain clearing), a furnace repair the company doesn't do, and a rough price for a new bathroom it must not guess. Afterward you read the Transcription tab and check every answer against the documents.
Try this lesson free or read the step-by-step guide.
Common confusions
Conversational AI vs chatbot
A chatbot is one kind of conversational AI, usually text. Conversational AI also includes voice agents and assistants.
Conversational AI vs IVR
An interactive voice response system plays menus ("press 1"). Conversational AI understands spoken requests in your own words.
Tips
- Tell people they are talking to AI at the start.
- Limit answers to your documents and give a fallback line.
- Test with the three questions most likely to trip it up, then read the transcripts.
Related terms
More Voice agents terms
Where you use it: free lessons
- Give Your Voice Agent Knowledge: A Price List and FAQ in ElevenLabs (ElevenLabs Agents, 9 min)
- Your First Voice Agent in ElevenLabs: An After-Hours Receptionist (ElevenLabs Agents, 9 min)
- Add an AI Chatbot to Your Website with Lovable AI (Lovable, 8 min)
- Gemini Deep Research: Build a Cited Brief Before a Client Meeting (Gemini, 6 min)
Frequently asked questions
- Is ChatGPT conversational AI?
- Yes. It is a general conversational assistant. Business chatbots and voice agents are conversational AI set up for a narrower job.
- Does conversational AI need coding?
- Not with platforms like ElevenLabs or Lovable. You write instructions and add documents, then test.
- What is the difference between conversational AI and generative AI?
- Generative AI creates content of any kind. Conversational AI is the use of it, and related tools, to hold a conversation.