State

User inputs, logically computed values, NLU results, etc. are stored in variables in specific state. While designing the dialog, you can decide which variables need to be stored in which state.
We have the following states in AI Studio,

Dialog State

The scope of Dialog State lasts as long as the current dialog. Once the dialog execution is completed, the variables in this scope are deleted. Branched dialog(s) will have access to its parent dialog(s) Dialog State variables. It can be used to store dialog-specific information like ticked id for retrieving the ticket information or the user.

Conversation State

The scope of Conversation State lasts as long as the conversation. In the case of Microsoft Teams, once the conversation starts, it never closed so all dialogs happen in the same conversation. In the case of webchat, every time the user connects to webchat a new conversation is started. It can be used to store conversation-specific information like users’ experience with chatbots in the current conversation.

User State

The scope of User State persists throughout all conversations for the particular user. This can be used to store permanent information about users like their language preference or the state they are from.