For most people, interacting with AI still means typing into a box and reading a response. It is functional. It works. But it is also a long way from how humans naturally communicate with each other.

A growing number of companies are betting that the next phase of AI is not just about smarter models. It is about more human interfaces, specifically digital humans: real-time, conversational avatars that speak, respond, and adapt in ways that feel closer to a real interaction.

The idea is straightforward. If AI is going to be embedded into everyday business workflows, it needs to feel less like software and more like conversation.

AI market moving fast

The numbers reflect a shift that is already underway. The digital human market is projected to grow from $6.28 billion in 2025 to more than $26 billion by 2031, a compound annual growth rate of nearly 27%, per Mordor Intelligence.

That growth is being driven by enterprises, not consumers. Companies are looking for ways to scale communication, training, and support without proportionally scaling headcount.

Digital humans offer a model that runs around the clock, works across languages, and does not require a human on the other end of every interaction.

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Major technology companies have taken notice. NVIDIA has built out its Avatar Cloud Engine, a suite of tools that allows developers and enterprises to create interactive AI-powered digital humans. Meta’s Reality Labs has continued investing in lifelike avatar and immersive interface research as part of the company’s broader AI push.

From one-way video to live conversation

One of the most significant shifts in this space is the move from pre-recorded AI video to real-time, two-way interaction. Earlier generations of AI avatars were largely used to produce scripted content for training modules or marketing materials. Useful, but limited in how users could actually engage with them.

That is changing as the underlying technology matures. D-ID, an enterprise AI avatar company, this week launched V4 Expressive Visual Agents, its latest generation of digital humans built for real-time, LLM-connected conversations. Gil Perry, co-founder and CEO of D-ID, explained how the practical reality for businesses has shifted.

“A year ago, businesses were largely using AI video as a standard format for content production, creating pre-rendered clips for training, marketing, or communication. It was powerful, but fundamentally one-directional,” Perry told TheStreet.

“With V4, we’re moving into real-time, interactive experiences. This is no longer early-stage experimentation. The quality of interaction has reached a level where conversations feel authentic enough for real-world, high-frequency use cases. V4 has taken the real-time visual agent technology to a state that is mature enough for wide usage. What’s changed is that these are no longer pilot projects – companies are moving into production-scale deployments.”

That transition from static to interactive is significant. It turns digital humans from content tools into live communication platforms, capable of handling queries, adapting responses, and sustaining multi-turn conversations at scale.

Why businesses are moving now

The question of timing matters. Digital human technology has existed in various forms for years. What has changed is that the ROI case has become easier to make.

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“First, clear ROI use cases have emerged – especially in corporate learning, training, onboarding, and internal communications. These are areas where companies need to deliver consistent, scalable, and engaging experiences across large, distributed workforces. Second, there’s a shift toward more engaging interfaces for AI. Text-based systems are powerful but often underutilized. Digital humans provide a more natural way to interact with AI, which increases adoption. Third, enterprises are under pressure to scale expertise and communication without scaling headcount. Digital humans can deliver knowledge consistently, 24/7, across languages and regions,” Perry said.

Where enterprises are deploying digital humans most actively

  • Corporate learning and development: Consistent, scalable training delivered to distributed workforces without scheduling constraints
  • HR onboarding: New employees get the same quality of information regardless of location or time zone
  • Customer support: AI agents that handle high-frequency queries without escalating every interaction to a human
  • Pre-sales and product education: Prospects engage with an interactive AI that explains complex products naturally

The trust barrier is real but solvable

User skepticism around AI avatars remains a genuine challenge, particularly when an interaction feels close to human but not quite right.

Companies in this space have recognized that higher visual fidelity alone does not solve the problem. Trust tends to come from consistency, transparency about what users are interacting with, and whether the system reliably delivers value. If a digital human helps someone get what they need quickly, the skepticism tends to fade.

What comes next

Digital humans are unlikely to replace text-based AI for every use case. Typing a quick prompt will remain the fastest path to a lot of information.

But as AI moves deeper into business operations, the demand for more natural interfaces is growing. Deloitte’s 2026 report found that worker access to AI rose 50% in 2025, and the number of companies with significant AI projects in production is expected to double within months. That scale creates pressure to make AI easier to use, not just more capable.

Digital humans sit squarely in that space. They offer a way to make AI feel less abstract and more accessible, especially where communication and engagement matter most.

The future of AI may not just be about what it can do. It may be about how it shows up.

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