How much does a basic AI chatbot cost?

A basic AI chatbot that handles FAQs and simple queries costs between £2,000 and £5,000 for a custom build. Off-the-shelf platforms like Intercom, Tidio, or Chatling charge £50-200/month with limited customisation. Free options exist (Chatbase free tier, Botpress community) but lack business features and compliance controls.

Why are custom AI chatbots so expensive?

They're not, relative to what they replace. A custom chatbot at £5,000 that handles 60% of your customer queries saves you one part-time hire — that's £12,000-£15,000/year. The cost comes from integration with your systems (CRM, databases, order management), training on your specific data, and building in compliance requirements like DPIAs and proper data handling.

What's the ongoing cost of running an AI chatbot?

LLM API costs (the AI processing) typically run £50-300/month depending on conversation volume. Hosting adds £20-100/month. If you're on a platform like Intercom, you pay their monthly subscription instead. Custom builds have lower ongoing costs but higher upfront investment. Total ongoing cost for most SMEs: £100-400/month.

Can I build an AI chatbot for free?

You can build a basic one for free using platforms like Botpress, Chatbase (free tier), or open-source tools like Rasa. But free tiers have conversation limits, lack business integrations, offer minimal compliance controls, and typically show the platform's branding. For anything customer-facing at a business level, you'll need to spend money — the question is how much.

What's cheaper — building a custom chatbot or using a platform?

Platforms are cheaper in year one. A £150/month platform costs £1,800/year. A custom build costs £3,000-£8,000 upfront. But by year two, the custom build is often cheaper — ongoing costs are lower (just API fees and hosting), you own the system, and you're not locked into monthly subscriptions. Plus, custom builds include compliance documentation that platforms don't.

AI Chatbot Cost 2026: £2,000 to £12,000 — Full Pricing Breakdown

Every conversation I have about AI chatbots starts the same way: "How much?"

Fair question. And the reason you're getting garbage answers from most agencies is that they quote a build cost and conveniently forget to mention the running costs, the compliance costs, and the cost of fixing everything when the first version doesn't work.

So here's the actual breakdown. Real numbers, 2026 UK market rates, nothing hidden.

What You Want	Build Cost	Ongoing Costs
Free chatbot tool (basic)	£0	£0 (with limits)
Platform subscription (Intercom, Zendesk AI, Tidio)	£0 upfront	£50-300/month
Custom chatbot — FAQ only	£2,000-£5,000	£50-150/month
Custom chatbot — CRM integrated	£5,000-£8,000	£100-250/month
Custom chatbot — full system + compliance docs	£8,000-£12,000	£150-400/month

Enterprise is different and higher. But if you're an SME in the UK, that table covers your options.

Want an exact number for your project? A £500 scoping review scopes the use case, integrations, and compliance requirements — then tells you exactly what the build should cost. No guessing.

What pushes the price up (and down)

Complexity is the biggest factor. A simple FAQ bot (£2,000-£5,000) answers questions from your knowledge base — products, pricing, policies, opening hours. No system integration, no order lookups.

A mid-range build (£5,000-£8,000) connects to your CRM, order management, or booking platform. The chatbot can actually look up an order, check availability, pull customer records. It hands off to a human when it's stuck.

A complex build (£8,000-£12,000) is a full custom workflow — multiple data sources, conditional logic, analytics dashboard, multilingual, compliance documentation. At this level the chatbot is a new customer service channel that integrates with everything you run.

Integrations add up. Each system the chatbot talks to means more development and more testing. CRM (HubSpot, Salesforce) adds £1,000-£2,000. E-commerce (Shopify, WooCommerce) adds £500-£1,500. Booking system, £500-£1,000. Payment processing, £1,000-£2,000. Custom API or database, £1,000-£3,000. The chatbot itself might cost £3,000 but by the time you've connected it to three systems you're at £6,000.

The AI model matters less than you'd think. Cloud LLMs — OpenAI GPT-4o, Anthropic Claude, Google Gemini — give the best responses at roughly £0.01-0.06 per conversation. Open-source models (Llama, Mistral) are slightly behind in quality but keep data on your own servers, which simplifies GDPR compliance. Hosting runs £50-200/month. For most SMEs, a cloud LLM with a proper DPA is the pragmatic choice unless you're in a regulated industry where data can't leave your environment.

Compliance is the cost that nobody puts in the quote. Your chatbot processes personal data — names, email addresses, conversation content. Under GDPR, you need a DPIA (£1,500-£3,000 done separately), Data Processing Agreements with your LLM provider and third-party services, updated privacy notices, and AI Act transparency disclosure from August 2026. Most platforms and freelancers leave all of this to you. A good builder includes it in the price.

What happens if you skip compliance? The ICO fined MediaLab.AI £247,590 for running an AI system without proper data protection measures. GDPR fines go up to €20 million. The AI Act adds fines up to €35 million. For an SME, even a small regulatory action can be devastating.

Platform vs Custom: The Real Comparison

Platform (Intercom, Zendesk AI, Tidio, Chatling)

Upfront cost: £0 (monthly subscription model) Monthly cost: £50-300/month depending on features and conversation volume Year 1 total: £600-£3,600

What you get:

Quick setup (days, not weeks)
Pre-built templates and flows
Basic analytics
Regular updates from the vendor

What you don't get:

Deep integration with your specific systems
Control over where data is processed
Compliance documentation
Ownership — you're renting, not buying
Customisation beyond what the platform allows

Hidden costs:

Per-conversation fees above your tier limit
Premium features locked behind higher tiers
Migration costs when you outgrow the platform
Separate compliance costs (DPIA, legal review)

Custom Build

Upfront cost: £2,000-£12,000 Monthly cost: £50-400/month (hosting + API fees) Year 1 total: £2,600-£16,800

What you get:

Built for your exact workflow
Integrates with your existing systems
You own it — no monthly subscription to a platform
Compliance built in from day one (DPIA, DPAs, transparency)
Full control over data flows and hosting location

What you don't get:

Instant setup — custom builds take 2-6 weeks
Automatic updates — maintenance is on you (or your builder)
A community of other users with shared templates

The Break-Even Point

A £150/month platform costs £1,800/year. A £5,000 custom build with £150/month running costs totals £6,800 in year one but £1,800 in year two and beyond.

Custom build breaks even in year 2-3 for most SMEs. If you're planning to use an AI chatbot for more than 18 months (you should be), custom is almost always cheaper long-term.

What the quote won't tell you

Ongoing costs are real. Your chatbot isn't a one-off purchase. LLM API usage runs £50-300/month scaling with conversation volume. Hosting adds £20-100/month. Maintenance and updates cost 2-4 hours per quarter. And every time your products, prices, or policies change, someone needs to update the knowledge base. Budget £100-400/month after launch.

Your training data matters more than the model. GPT-4 gives terrible answers if you feed it terrible product information. Before you build anything, clean up your FAQ, verify your pricing is current, document your policies clearly. This prep work is free. It also determines whether your chatbot helps or embarrasses you.

It will get things wrong. AI chatbots hallucinate — they state wrong things with complete confidence. Your bot will occasionally quote a price that doesn't exist or describe a feature you don't have. You need a human handoff for low-confidence responses, conversation logging to review what went wrong, a feedback button for customers to flag bad answers, and someone reviewing conversations monthly to catch patterns. Any builder who doesn't include these safeguards is selling you a liability, not a product.

Cheap builds cost more. A £1,000 chatbot from Fiverr might work initially. Then it breaks and nobody's available to fix it. You need to add a feature and the original developer is gone. A customer files a GDPR subject access request and you can't find their data. Someone complains about an AI interaction and you have no conversation logs. That £1,000 build becomes very expensive very quickly. The right question isn't "what's cheapest to build?" — it's "what's the total cost of ownership over 2-3 years?"

Real Examples: What Businesses Are Paying

Local estate agent — FAQ chatbot: Property listings, viewing bookings, mortgage calculator FAQ. Basic build, website widget only. Cost: £3,000. Running costs: £80/month. Handles 40% of enquiries automatically.

E-commerce brand — customer service bot: Order tracking, returns processing, product recommendations. Integrated with Shopify and email. Cost: £6,500. Running costs: £200/month. Reduced customer service tickets by 55%.

Professional services firm — intake and qualification: Client enquiry qualification, document collection, appointment scheduling. CRM integrated with compliance documentation. Cost: £9,000. Running costs: £180/month. Eliminated one part-time admin role.

These are representative of UK SME pricing in 2026. Your specific project may be more or less depending on the variables above.

How to Get an Accurate Quote

When you approach a chatbot developer, come prepared with:

What do you want it to do? List the specific tasks, not "I want a chatbot"
What systems does it need to connect to? CRM, order management, booking, etc.
How many conversations per day/week? This affects API costs
What data will it access? Customer names, order history, payment info?
Where are your customers? EU customers mean GDPR applies, even if you're outside the EU
Do you need compliance documentation? DPIA, DPAs, privacy notice updates?

A good builder will give you a fixed-price quote based on these answers. If someone can't quote without weeks of "discovery," they either don't know what they're doing or they're planning to bill by the hour.

The Bottom Line

An AI chatbot costs between £0 and £12,000 depending on what you need. For most SMEs, the sweet spot is a custom build in the £3,000-£8,000 range that handles your specific workflows, integrates with your systems, and comes with the compliance documentation you need.

Don't buy the cheapest option. Don't buy the most expensive option. Buy the one that solves your actual problem and doesn't create a regulatory one.

Want a straight answer on what your chatbot would cost? Start with a £500 scoping review. We scope the use case, integrations, and compliance requirements first, then tell you what the build should cost. If the project is straightforward, our AI Chatbot + Compliance Package starts at £3,500.

Keep reading: For a step-by-step guide on the build itself, see how to automate customer support with AI. If you need something more advanced than a chatbot, our guide on AI agents for business explains the difference and when it's worth the extra investment. View our services and pricing for the full picture.