AI chatbots enhance customer service interactions by providing instant responses to inquiries, thereby improving customer satisfaction and efficiency. These chatbots utilize natural language processing to understand and respond to various queries, assisting in troubleshooting, order tracking, and frequently asked questions. Their ability to operate 24/7 reduces wait times and provides consistent support. Additionally, integrating chatbots with other systems enables businesses to collect valuable data on customer interactions, which can be used to improve service quality and tailor offerings, ultimately leading to better customer engagement and loyalty.