5 Best AI Chatbots in 2024

AI chatbots have gotten a ton of attention in recent months following the launch of OpenAI's ChatGPT.

The technology, based on a large language model, has the ability to write code and essays, and can pass high-level exams like those used in law, business, and medical schools. ChatGPT's owner, OpenAI, has partnered with Microsoft (MSFT 1.53%). The tech giant first formed a strategic partnership with OpenAI back in 2019, and recently invested $10 billion in OpenAI after the release of ChatGPT, a sign of its confidence in the new AI chatbot.

However, ChatGPT is far from the only AI chatbot on the market. There are a number of virtual assistants and other tools available, some of which readers are already familiar with, including Amazon's (AMZN 0.77%) Alexa, Apple's (AAPL 0.38%) SIRI, Microsoft's Cortana, and Alphabet's (GOOG 1.39%) (GOOGL 1.48%) Google Assistant.

ChatGPT, however, has raised the bar for chatbots and introduced consumers to a form of AI known as generative AI.

In this article, we'll discuss what an AI chatbot is, review some AI chatbot stocks you can invest in, and explore whether you should invest in AI chatbot technology today. If you're wondering about the best AI chatbots, keep reading.

What are AI chatbots?

What are AI chatbots?

A chatbot is an artificial intelligence-based computer program that uses natural language processing to communicate with humans, using texts. Chatbots are a common tool for customer service, internet search, and other routine tasks for internet users. AI chatbots are also used internally by businesses to help automate workflows and other tasks.

Their utility has evolved in recent years as artificial intelligence has improved, and large language models have been trained to process complex questions and understand nuance. You can even make your own AI chatbot using the Python coding language.

As AI chatbots have improved, the market potential for the technology has increased, as can be seen in OpenAI's recent valuation at a reported $29 billion after raising $10 billion from Microsoft.

With OpenAI having demonstrated the capability of AI chatbots, investor interest in the technology has soared. Keep reading to see how you can get exposure to AI stocks in the chatbot space.

5 best AI chatbots to buy in 2024

1. Microsoft

1. Microsoft

Through its partnership with OpenAI and ChatGPT, Microsoft appears to have jumped out to an early lead in the AI chatbot race.

The company is working quickly to integrate ChatGPT into a wide range of its products. That includes Azure, its cloud infrastructure service, the new Bing, and its Edge browser. It's also reportedly working on adding ChatGPT features to its Office suite, which includes products like Word, Excel, PowerPoint, and Outlook.

Microsoft CEO Satya Nadella has said on multiple occasions that he sees AI as a platform shift, and the company has doubled down on its relationship with OpenAI after investing $10 billion in the start-up in early 2023.

After his company missed out on the shift to mobile, Nadella is committed to not making the same mistake twice. Expect Microsoft to continue to spend aggressively on ChatGPT and other AI tools.

If you're looking to invest in ChatGPT, Microsoft gives you the most direct way to do so.

2. Alphabet

2. Alphabet

Alphabet has been investing in artificial intelligence for years. It acquired DeepMind, an AI research lab, in 2014, and it's spent billions on its autonomous-vehicle division Waymo.

After the release of ChatGPT in November 2022, Alphabet moved quickly to counter what seemed to be the most serious threat to Google Search yet, calling a "Code Red" meeting, and bringing back founders Sergey Brin and Larry Page to formulate a strategy.

Alphabet released Bard AI in February 2023, just a day after Microsoft and OpenAI unveiled the new Bing. The presentation was marred by a factual error and gave the impression that Alphabet had rushed the new chatbot to stem concerns about ChatGPT.

Bard is powered by Google's LaMDA, one its large language models, and it plans to integrate Bard's features into Google Search. Currently, Bard is not available to the public, and the timeline for its release is unclear. However, CEO Sundar Pichai said the company pivoted to an AI-first business model several years ago, and the company is expected to be a major player in AI chat.

3. Baidu

3. Baidu

Baidu is often known as the Chinese Google and the company's move into AI chat shows it has more than just search in common with Alphabet.

In February, Baidu joined the fray in AI chat, announcing that it would also launch its own chatbot that will serve as a complement to its search engine.

Known as ERNIE bot, the chatbot was released in March 2023.

Baidu first began developing its language model in 2019, and the technology has advanced significantly since.

ERNIE was launched as a standalone application first, and but eventually will merge with its search engine, choosing chatbot-generated results rather than just links.

The company is also investing aggressively in other AI technologies like self-driving cars and semiconductors, and sees artificial intelligence as a valuable growth market.

4. IBM

4. IBM

IBM has long been developing artificial intelligence, including Deep Blue, the computer that beat the reigning world chess champion, and Watson, its supercomputer that won the game show Jeopardy and has been used in a wide range of fields, including medical diagnostics, manufacturing, supply chains, and agriculture.

IBM also has a Watson AI chatbot, known as IBM Watson Assistant, that uses machine learning, deep learning, and natural language processing to understand questions and give the best answers through conversational AI.

The Watson AI chatbot isn't available to the general public, but is used by a broad range of companies, including Humana, Panasonic, and Quicken Loans.

With its focus on enterprise customers, IBM isn't competing directly with chatbots like ChatGPT or search-based chat, giving investors exposure to another opportunity in AI chat, since the enterprise sector also makes up a large market for AI chat.

5. Meta Platforms

5. Meta Platforms

Meta Platforms has invested significant resources in artificial intelligence as well, but most of that funding has gone toward recommendation AI, or the algorithms that determine the content served to users on Facebook and Instagram.

However, the company has been focused on generative AI and conversational AI more recently, including AI chatbots.

In August 2022, the company released a chatbot called BlenderBot 3, which is still available but has not gotten the level of attention of ChatGPT.

The company also released a large language model focused on science research called Galactica in Nov. 22, but it pulled that after just a few days due to inaccuracies.

More recently, the company launched LLaMa, a large language model designed for research. Though LLaMa is not a chatbot, it uses similar technologies as ChatGPT and other chatbots and could pave the way to a future AI chatbot from Meta, or an improvement on Blenderbot.

CEO Mark Zuckerberg sees conversational and generational AI as a huge potential market, and the company plans to continue in chatbots and related areas.

Should you invest in AI chatbot technology?

Should you invest in AI chatbot technology?

AI chatbot technology is still in its early stages, but it seems clear from the billions being spent on the technology by the world's biggest tech companies that this will be a significant computing platform.

There's a wide range of applications for a product like ChatGPT and its potential to disrupt internet search, a market worth hundreds of billions of dollars, shows the potential value of AI chat.

While picking a winner is difficult at this point as more chatbots are likely to come on the market soon, it makes sense to get exposure to the technology, considering its potential. Like any emerging technology, investing in AI chatbots carries some risk, but many of the stocks above are already trading at reasonable valuations. If you're interested in investing of chatbot stocks, another option is to invest in an AI ETF.