An AI powered chatbot is a smarter version which uses natural language processing (NLP) and machine learning (ML) to better understand the intent of the human and provide a more natural, near human-level communication. An AI powered chatbot is basically a replacement of a human with a tool that's designed to simulate human conversation. Users communicate with these tools via a chat interface or voice. Chatbots interpret the words given to them by a person and provide a pre-set answer.