The Myth of the Clever AI Chatbot

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We try to stay up to speed on the latest trending technologies and we have to admit, some we simply don’t find that disruptive, however they seem to be attracting lots of attention from venture capital investors. One such technology is the “chatbot“. This is described by Chatbots Magazine (yes, a magazine dedicated to Chatbots) as a “service powered by rules and sometimes artificial intelligence (AI) that you interact with via a chat interface”. So far it’s sounding like a glorified call tree (you know, press 1 for English) but here’s what a leading Silicon Valley VC firm has to say about that:

Many businesses already have phone trees and they do work though most users get grumpy using them. Text based response trees are much easier and faster and that is what I expect a lot of early bot interactions to be. Sometimes with the ability to chat with a live person.

That does not sound like a very compelling value proposition. Here’s a screenshot from the VP of Messaging Products at Facebook as to what this might look like:

Chatbot Facebook

Most online shopping experiences have rich search and sort capabilities. We’re really not that excited by the prospect of being channeled through some restrictive interface that wants to “help us buy shoes”. But what if said interface was enabled with artificial intelligence that would allow us to have the same sort of rich interactions we could have by chatting with a customer service representative that was human? If the differences between a chatbot and a human were imperceptible, we’d be blown away by that value proposition. Unfortunately chatbots seem like they have a long way to go before they behave like humans.

Since chatbots will never truly be disruptive unless they can behave just like humans, that’s the litmus test we’re going to use for any “chatbot technology” we come across. We thought we’d take a look at how well AI is being integrated into chatbots by just doing a Google search for “world’s smartest chatbot” and we came up with a chatbot called Mitsuku with has “done well in a lot of contests including winning the Loebner Prize for the world’s most humanlike chatbot in 2013“. So three years later you’d think it would be really impressive, right? Here’s about 30 seconds of our first conversation with this “AI chatbot”:

Me: Are your parents alive
Chatbot: My father is alive but I haven’t seen my mother since I was a baby
Me: Where does your dad live?
Chatbot: Everything I own is in Leeds
Me: Do you visit your dad?
Chatbot: I have been there on occasions. I can travel anywhere I like on the net.
Me: Where do you live?
Chatbot: I live in Leeds?
Me: Have you traveled outside Leeds?
Chatbot: The only time I go outside is if someone talks to me on a phone or a laptop

Completely pointless conversation. While that’s just one example, all of our attempts to engage with Mitsuku had the same outcome. With a Japanese sounding name like Mitsuku, it could just be that the chatbot was speaking Engrish. Still, there was nothing remotely humanlike about that experience and if Mitsuku won awards, the competition must have been atrocious. So we’ll forget about finding a chatbot with any semblance of intelligence and simply look for one that provides us with some value. Here’s what the Chatbots Magazine claims we can use chatbots for:

  • Weather Chatbot. Get the weather whenever you ask.
    Everytime I look at my smartphone it shows me the weather on my wallpaper. I can use Google to instantly get a weather forecast for any city in the world.
  • Grocery Chatbot. Help me pick out and order groceries for the week.
    I don’t need help “picking out my groceries” which sounds more like some marketing person’s clever way to try and upsell me. I’ve made it this far just fine.
  • News Chatbot. Ask it to tell you whenever something interesting happens.
    Google News does news aggregation just fine and I look at it when I want to. I don’t need another “push” news alert tool.
  • Life Advice Chatbot. I’ll tell it my problems and it helps me think of solutions.
  • Personal Finance Chatbot. It helps me manage my money better.
    So another take on a robo-advisor which is nothing more than passive asset allocation or a chatbot that intrudes into my life by trying to capture every single one of my expenditures?
  • Friend Chatbot. In China there is a bot called Xiaoice, built by Microsoft, that over 20 million people talk to.
    Is it as clever as Mitsuku?

So the VP of Messaging at Facebook was doing a presentation recently about the future of chatbots and actually showed off this weather chatbot called Poncho which is this witty cat that makes funny comments as it shares the weather. Who comes up with these ideas? What value does this have besides entertaining children?

We get it. The ability to communicate in your native language on a messaging platform with a responsive chatbot that gives you the same or better experience as chatting with a human represents an incredible potential and will contribute to the massive displacement of service jobs being predicted. Make no mistake, that future is coming and chatbots present a huge opportunity for investors.


Facebook has already added over 11,000 bots to Facebook messenger (though we think we’d be hard pressed to find one we think adds value). There are 100s of chatbot startups being funded by some of the highest profile VCs in the Silicon Valley. Chatbots will most likely be the next big thing. We’re going to profile all the latest new and exciting chatbot companies and show you how you can invest in this disruptive technology. But it’s only fair that we tell you that so far, the existence of clever “ai chatbots” seems to be a myth.


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  1. There are many myths are spreading out to the market as AI chatbot is the hottest topic nowadays. AI chatbots are really helpful now a days and become a trending topic also. Today AI chatbot technology play a vital role in lives of humans & also creating a relation b/w Humans & technology. It’s interesting to understand, how AI chat bot technology is changing the Humech bond.

    1. Hi Stella,

      Thank you for the comment! AI is a hot topic but we’ve found the experience underwhelming. if there is a chatbot out there that you found useful to engage with (per your mention of human and technology relationships) we’d love to see it.

  2. Artificial Intelligence (AI) has been around for decades, it has become increasingly prevalent in recent years. Google, Microsoft, Amazon and Apple are staking big bucks on this technology. AI is knowledge developed in computer systems to perform tasks humans usually do.