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Conversational agents are the stepping stones for the next generation of interaction between users and computers. Not only is this a more natural way for people to interact, but also it would increase e ciency and speed in working with computers. In this paper, I will present some major parts of what a conversational agent needs in order to work and show what have been done in some areas as well as what still needs to be done. We are still quite far from building a conversational agent for general use, but I hope to show in this paper that we already posses the knowledge to build constrained agents that work in narrow domains who can interact naturally with people in this domain. For the more general agent, however, I will point out some areas that need further work and where I think this work needs to be headed.