AI Chatbots – What a Chatbot Is, What It’s Used For, and Its Advantages
Although the first chatbot, called ELIZA, was created back in 1966 at MIT by Joseph Weizenbaum, by 2025 chatbots have made tremendous progress thanks to multimodal LLM models (text, voice, images, video) and the increasing use of AI agents capable of executing tasks independently.
What Are Chatbots and How Do They Work?
A chatbot is a computer program designed to conduct conversations with users via text or voice. Its purpose is to enable fast, automated communication between humans and systems, whether in customer support, sales, education, or everyday assistant tasks.
Modern chatbots can be integrated with databases, CRM systems, or web services and perform complex tasks – from providing information to independently executing actions such as making reservations or processing requests. Thanks to advances in natural language processing (NLP) and contextual understanding, chatbots are increasingly becoming digital assistants capable of meaningful collaboration with users.
Classification of Chatbots by Architecture
Generative Chatbot
- Technology: Large language models (LLM) such as GPT-5, Claude, Gemini.
- How They Work: They receive user input and generate responses based on their pre-trained knowledge.
- When Used:
- When the goal is natural dialogue and flexible conversation.
- Examples: Virtual assistants, chat support for a wide range of topics.
- Limitation: The model only knows what it learned during training and cannot access private documents or databases.
RAG Chatbot (Retrieval-Augmented Generation)
- Technology: Combines LLM with a knowledge base or documents (vector database/embeddings).
- How They Work:
- User input is searched through proprietary data or documents.
- Relevant content is passed to the LLM as context to generate a response.
- When Used:
- When the chatbot needs to answer questions based on private or organization-specific data (manuals, databases, PDFs).
- Examples: Internal company support systems, Q&A bots for documentation, quick retrieval of objects from a database (ads, references, invoices, official documents).
- Note: RAG chatbots operate directly on personal or organizational files and are customized for each organization.
Tin Martinić
Neviox Digital CEO with an Engineer's degree in Computer Science from the University of Split, and multiple certifications, my core competencies span across front-end and back-end technologies, with an emphasis on Langchain, Next.js and AWS
