Title: What Is Conversational AI? Definition | Keres AI URL: https://www.keresai.com/glossary/conversational-ai Updated: 2026-10-12 Description: Conversational AI understands and replies in natural language by voice or text. How it works, how it differs from IVR and chatbots, and what it costs. Source: https://www.keresai.com/glossary/conversational-ai (HTML). This is a Markdown copy of the page's main content for AI agents and LLM tools. --- # What is Conversational AI? Conversational AI is software that understands what a person says or types in their own words and replies in natural language. It combines speech recognition, a language model and speech synthesis to hold a two-way conversation, follow context and complete tasks such as booking an appointment. ## How does conversational AI work? On a phone call, each turn of the conversation goes through five steps: 1. **Speech recognition** turns the caller’s audio into text as they speak. 2. **Language understanding**, usually a large language model, works out what the caller wants and what information is still missing. 3. **Tools and rules** let it act: check calendar availability, look up a customer, or follow your escalation rules. 4. **Response generation** writes the reply, kept to your script and approved facts. 5. **Speech synthesis** reads the reply aloud in a natural voice, and the loop repeats until the task is done. In text channels such as chat and SMS, the first and last steps drop out; the middle is the same. ## Conversational AI vs chatbots and IVR Rule-based chatbots and [IVR](https://www.keresai.com/glossary/ivr) menus follow fixed scripts: the user picks from options the designer anticipated. Conversational AI handles open-ended input, interruptions and corrections (“actually, Thursday is better”). The trade-off is control. A scripted system can only say what was written; a conversational system needs clear instructions, approved facts and escalation rules so it stays accurate. That is why business deployments pair it with guardrails and a human fallback. ## What does conversational AI cost? Building conversational AI yourself means paying for speech, language-model and telephony usage, plus the engineering time to connect and test it. Packaged products such as AI receptionists usually charge a monthly rate with included minutes. See [how much an AI receptionist costs](https://www.keresai.com/ai-receptionist-cost) and [Keres AI pricing](https://www.keresai.com/pricing). ## How does Keres AI handle it? [Remi](https://www.keresai.com/agents/inbound) is Keres AI’s conversational AI for the phone. It answers in two rings, 24/7, asks your intake questions in conversation rather than through a menu, books into Google Calendar, HubSpot or ServiceTitan, and escalates to a person by your rules. Calls Remi couldn’t take get a text back within 60 seconds. Remi answers in English today. See the product behind this concept ### Want to see Conversational AI working in practice? See how Keres puts it to work for your vertical and workflow. ### [AI Receptionist](https://www.keresai.com/glossary/ai-receptionist) An AI receptionist is software that answers your business phone automatically, 24/7. The software greets callers in a na… ### [IVR (Interactive Voice Response)](https://www.keresai.com/glossary/ivr) IVR (interactive voice response) is an automated phone system that greets callers with a recorded menu and routes them b… ### [Call Routing](https://www.keresai.com/glossary/call-routing) Call routing is the set of rules that decides where an inbound call goes: to a person, team, location, queue or voicemai… ### [Lead Qualification](https://www.keresai.com/glossary/lead-qualification) Lead qualification is the process of deciding whether an inquiry is a real fit for your business before your team spends… [← Back to the full glossary](https://www.keresai.com/glossary) ## Conversational AI — FAQ ### Is an AI receptionist conversational AI? Yes. An AI receptionist is a voice application of conversational AI built to answer business calls, ask intake questions and book appointments. ### What is the difference between conversational AI and a chatbot? A traditional chatbot follows a fixed script and a menu of options. Conversational AI understands open-ended language, keeps track of context and can complete tasks, though it still needs rules and approved facts to stay accurate. ### Can conversational AI make mistakes? Yes. It can mishear a word or misunderstand a request. Well-run systems read key details back to the caller, stick to approved information and hand unclear or sensitive calls to a person. Last updated October 12, 2026 · [Reviewed by the Keres AI team](https://www.keresai.com/editorial-policy)