Last checked: 6 November 2026
In short: A chatbot is a computer program that holds a conversation with people through text or voice. Simple chatbots follow fixed scripts, while modern ones use large language models to write their replies.
Table of Contents
How it works
- Message in. A user types or says something in a chat window, app or messaging service.
- Find a reply. A rule-based bot matches keywords to set answers, while an AI chatbot writes a fresh response from its training and any documents it can search.
- Answer out. The bot replies, asks for more detail or hands the chat to a person.
Where you’ll meet it
ChatGPT, Claude, Gemini and Microsoft Copilot are chatbots. You also meet them in the chat bubble on retail, bank and airline websites, and in WhatsApp business chats.
What it means for your business
- First-line support gets cheaper. A chatbot can answer common questions at any hour, so staff deal with harder cases.
- You own every answer. Tribunals have held companies to their chatbot’s answers.
- Feed it your real policies. Connecting it to up-to-date policy documents, and limiting it to them, cuts wrong answers.
Watch out for
- Confident errors. AI chatbots can invent policies, prices or facts. Test them on tricky questions before launch.
- Hiding the exit. Customers resent bots that block them from reaching a person.
Example
Air Canada. In February 2024 a British Columbia tribunal ordered Air Canada to pay Jake Moffatt C$812.02, including C$650.88 in damages. The airline’s website chatbot had told him he could claim a bereavement fare discount after booking, which its policy did not allow. Air Canada said it could not be held liable for information from its chatbot. The tribunal rejected that, saying the chatbot was part of Air Canada’s website.
Chatbot vs AI agent
| Chatbot | AI agent | |
|---|---|---|
| What it does | Answers in a conversation | Plans and carries out tasks in steps |
| Takes action | Usually no, it gives information | Yes, using tools such as email, booking or payment systems |
| How they relate | Often the front door for an agent | Can sit behind a chat window and do the work |
Frequently asked questions
Are chatbots and AI assistants the same thing?
Mostly, yes. “AI assistant” usually means a more capable chatbot that remembers context, uses tools and works across apps. The terms overlap, and vendors use them loosely.
When should a company use a rule-based chatbot instead of an AI one?
When answers must be exact and questions are predictable, such as opening hours or returns steps. Fixed scripts can’t invent facts, though they handle unexpected questions badly.
Is it safe to let a chatbot give legal or financial advice?
No. It can produce text that looks like advice, but it carries no professional responsibility. Keep regulated advice with qualified people and limit the chatbot to general information and signposting.