In today’s binary pervasive world, we rely heavily on various forms of digital communication. Chatbots and virtual assistants are commonplace and humans have become accustomed to interacting with algorithm-powered assistants. Now, users are demanding a human touch to make engaging with our binary helpers feel more natural, as if communicating with another person.
Digital Humans are technology’s answer for how to bring chatbots and virtual assistants ‘to life’. They represent the next logical step in fashioning these assistants to be more human for a deeper connection between our biological selves and our binary helpers.
The transformation has been extraordinary. The global digital human market was valued at $31.50 billion in 2024 and is projected to reach $625.82 billion by 2032, representing a remarkable compound annual growth rate of 45.30%. This exponential growth reflects not merely technological advancement, but a fundamental evolution in how we conceptualise human-machine interaction.
But what are the benefits of more human-like virtual assistants, and how will they impact our digital world in the future?
The different levels of virtual assistants
The technologies powering these virtual assistants continue to evolve rapidly, with improvements to their capabilities released almost daily. Advanced AI, Machine Learning (ML), and Natural Language Processing (NLP) are the key technologies powering these digital helpers. Let’s break down the different levels of virtual assistants, and how we eventually got to Digital Humans.
Chatbots
Chatbots were the original commercially viable robots that entered the market. Designed with scripted responses for communication, chatbots use keywords in conversations to know how to reply. Limited functionality and scripted responses make chatbots a basic fit-for-purpose tool designed to assist users with providing relevant information (taking users from point A to B efficiently). Chatbots are information providers and are a great, cost-effective customer service tool but are very limiting when it comes to human-chatbot communications.
Virtual Assistants
Virtual assistants (VA) are an advanced form of chatbot that handle more complex interactions in a conversational way. The main capability for VAs is the ability to recognise voice commands using advanced AI, Natural Language Processing (NLP), and Machine Learning (ML). VAs can engage with other platforms allowing them, for example, to access your calendar and email to set up meetings, send emails, purchase concert tickets, or book hotels. Siri and Alexa are the most common VAs in the market.
With NLP, VAs understand queries and commands better than chatbots and offer more open dialogue responses (compared to the scripted responses of chatbots). They assist us with daily tasks such as directions, scheduling, taking notes, and much more.
So what does a more advanced VA with human-like characteristics look like? Enter Digital Humans.
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What is a digital human?
Digital humans are virtual AI avatars designed to interact with people conversationally that are incredibly human-like. They are a chatbot-VA hybrid but far more emotionally intelligent and expressive. They are designed to resemble real people both in appearance and behaviour to give users a relatable, human-like experience. Digital humans can be differentiated from chatbots and VA by the fact that they are given a personality so that they become someone rather than something, that humans talk with, not to.
The sophistication has reached remarkable levels. Interactive digital humans controlled 61.2% market share in 2024, with segment revenue forecast to expand at a 37.8% CAGR through 2030, as enterprises recognise the retention benefits of real-time dialogue and personalised emotional responses.
Current developments demonstrate unprecedented capabilities. Recent research unveiled next-generation digital humans capable of recognising and responding to over 40 distinct human emotions, with deployments in mental health settings supporting emotional therapy and anxiety management.
Digital humans also exist in the metaverse where they function as interactive tools designed to provide information and assist users. They are able to react intelligently to your digital interactions such as your tone of voice, body language, and facial expressions and respond with expressions of their own.
Because digital humans are designed to resemble humans it makes them significantly more engaging than chatbots or VAs. People receive far more profound and engaging interactions with digital humans as they are redefining the way we interact with AI, each other, and our wider digital world.
Digital Human use cases
Despite their sophistication, digital humans are expanding beyond customer services to become assistants across various applications – from teachers, personal avatars, brand ambassadors, influencers, retail concierges, financial advisors, and much more.
The market distribution reveals interesting patterns. Gaming and entertainment represented 37.4% of the digital human market in 2024, growing at a 35.2% CAGR. However, practical applications across industries demonstrate the technology’s versatility and impact.
Healthcare applications
Healthcare represents one of the most promising sectors for digital human deployment. Academic trials demonstrate increased adherence to cognitive-behavioural exercises when patients converse with relatable virtual counsellors. A 2023 pilot study by Stanford Medicine showed that avatar-led therapy sessions for anxiety patients delivered via VR headsets yielded comparable results to in-person therapy, with 38% reporting reduced anxiety symptoms after four weeks.
Digital human creators have developed solutions for healthcare ranging from patient onboarding and post-operative care to chronic disease counselling. Digital humans are now used in cognitive behavioural therapy (CBT), significantly improving patient outcomes.
Enterprise and Customer Service
Major enterprises are investing heavily in digital human technology. KPMG Australia launched its AI-enabled avatar platform to streamline enterprise onboarding and internal support, reporting a 25% reduction in HR operational costs. Similarly, Nestlé piloted a multilingual avatar for customer engagement in Latin America, resulting in a 15% increase in CSAT (Customer Satisfaction) scores.
Retail and E-commerce
Retail applications demonstrate significant commercial impact. Lowe‘s piloted a virtual avatar concierge in 2024 that resulted in a 12% increase in online conversions. These implementations address the growing demand for personalised shopping experiences whilst reducing operational costs.
The technology shows particular promise in addressing labour shortages and providing 24/7 availability. Samsung integrated NEON-powered avatars into customer experience touchpoints across Asia, significantly reducing human agent load whilst increasing resolution rates.
The future of Digital Humans
As we edge ever closer to complete adoption of the metaverse and Web3, every user will inevitably begin to use a digital human avatar as a persona to exist in our digital worlds. The connection between humans and digital ones will continue to grow and soon we will be interacting with AI-powered ‘humans’ for everything in the metaverse.
Recent developments reinforce this trajectory. In December 2024, NVIDIA Corporation announced its collaboration with a leading automotive manufacturer to integrate AI-powered digital humans as in-car virtual assistants. These assistants offer real-time guidance, entertainment, and personalised experiences, marking a significant convergence of AI and automotive technology.
Meta Platforms announced the launch of its advanced AI Digital Avatar platform, featuring enhanced emotional intelligence and multilingual support, making them ideal for diverse global applications across customer service, virtual retail, and education.
Soon, the average user will be able to design their own digital human in their image or as something/someone else. These digital extensions of ourselves will be the vehicle for how we interact with our digital world.
The convergence of AI, AR/VR, and digital twin technologies is reshaping how industries view human-machine interaction. With regulatory openness, enterprise demand for automation, and evolving consumer behaviour, the digital human market represents not just technological evolution, but a fundamental transformation in how we conceptualise presence, personality, and connection in our increasingly digital world.
The faces of the future are already here – they’re just waiting for us to embrace the extraordinary possibilities they represent.
Soon, the average user will be able to design their own digital human in their image or as something/someone else. These digital extensions of ourselves will be the vehicle for how we interact with our digital world.
