An AI chatbot released by the New York City government to help business owners access pertinent information has been spouting falsehoods, at times even misinforming users about actions that are against the law, according to a report from The Markup. The report, which was co-published with the local nonprofit newsrooms Documented and The City, includes numerous examples of inaccuracies in the chatbot's responses to questions relating to housing policies, workers' rights and other topics. Mayor Adams' administration introduced the chatbot in October as an addition to the MyCity portal, which launched in March 2023 as "a one-stop shop for city services and benefits." The chatbot, powered by Microsoft's Azure AI, is aimed at current and aspiring business owners, and was billed as a source of "actionable and trusted information" that comes directly from the city government's sites. But it is a pilot program, and a disclaimer on the website notes that it "may occasionally produce incorrect, harmful or biased content."

Devansh Bansal is the VP of the Emerging Tech Business Unit at Damco Solutions. The widespread adoption of chatbots was imminent with the stellar rise and consolidation of instant messaging. However, the accelerated pace at which chatbots have evolved from accepting scripted responses to holding natural-sounding conversations has been unprecedented. According to Google Trends, the interest in AI Chatbots has increased ten-fold over the last five years! With chatbots getting smarter, value-driven, and user-friendly, it has fueled customer-led demand for chatbot-driven interaction at every touchpoint.

Plenty of smartphone users are more in-touch with their friends and family through SMS message apps than they are through social media and other tools, especially among the older demographics. Businesses are also using SMS for a range of uses, mostly around appointments and services, yet the rise of chatbots makes them a natural way to engage via SMS using Twilio and SnatchBot to build a clever service without the need for deep technical knowledge. The modern SMS app on an iPhone or Android device is just as effective as Facebook Messenger and other services, but it has some critical advantages. SMS works when 4G connections are down, it works in places where connectivity is spotty and every phone owner knows how to use it. Those advantages mean that any business looking to adopt a chatbot should consider running it as part of its SMS service as well as on websites, apps and social media messaging to ensure a way to engage and connect with users, whatever their preference and technology skills.

And usage will grow: 48 percent of consumers are expected to own a smart speaker such as Amazon Echo, Google Home, and Apple HomePod in 2019. When the technology matures to work almost perfectly, which is not yet the case, adoption will not only come close to 100 percent, but each consumer will own multiple devices (including cheap, commoditized devices) that support voice.

A few years ago when chatbots were just gaining popularity, there was a lot of talk around what a chatbot actually was. With the advent of natural language processing and various machine learning techniques, some of the more advanced conversational applications wanted to separate themselves from their competition. Many began calling themselves "virtual assistants." This implied that they were somehow bigger or more powerful than existing chatbots, or perhaps were more conversational or could cover a wider range of topics. However, we quickly discovered that the market did not care how powerful the bot was or about the underlying technology, so long as it solved the right problems.

Chatbots, computer programs that mimic conversation with people by using artificial intelligence, "can transform the way you interact with the internet, from a series of self-initiated tasks to a quasi-conversation," The Guardian declared last year. Chatbots have been in use a long time, albeit in different forms. The automated customer-service robots that help navigate you through those seemingly endless phone trees when you call an 800 number were an early form of chatbots. So were the fake accounts that used to spam you on AOL Instant Messenger back in the opening days of the 2000s. Today, chatbots are much more sophisticated and make use of some pretty high-level artificial intelligence (AI).

Not all bots are created equal. To find one that can help you meet business goals, you're going to need one that can do much more than obey a few simple commands or respond humorously to questions. If your criteria for success goes beyond entertainment and engagement, and you're looking to achieve tangible business benefits -- such as reducing call volumes to the contact center or offsetting online shopping cart abandonment over the holiday season -- then understanding the difference between chatbots is critical. If you've ever engaged a virtual assistant like Alexa (or Google Assistant, Siri, or Cortana), then you probably don't have a lot of confidence in their ability to help improve your business in a serious way. And you're correct to be skeptical.

Chat apps characteristics make them very appealing to businesses and marketers. Prominent ones include their size, user retention, usage rates, and user demographics. In fact, the combined user base of the top four chat apps is larger than that of the top four social networks. Chat apps also have higher retention and usage rates than most mobile apps. Finally, the majority of their users are young, an extremely important demographic for brands, advertisers and publishers.

At TechCrunch Disrupt San Francisco in September 2016, Facebook's VP of messaging products, David Marcus, admitted that chatbots got "overhyped very quickly." And around the same time, something else very quickly changed: Chatbot pessimism became en vogue. The sudden change of opinion, like the original hype, is classic groupthink in action, moving with the tides. Don't get me wrong, I agree chatbots have been overhyped. But that only means that our expectations have been wrong.