Paper Number

2158

Paper Type

CRP

Abstract

Incumbent firms feel pressured to incorporate artificial intelligence (AI) in their business model (BM) to innovate and stay competitive. While transforming the BM with digital technologies is challenging, AI adds complexity through its countless applications and incomprehensible nature. Unraveling this complexity, we develop a taxonomy to describe and analyze how AI impacts incumbent BMs. The taxonomy builds on extant literature and the analysis of 46 empirical cases. Our findings reveal AI’s roles in enhancing and transforming offerings, key operations, and financial logic. In addition, the taxonomy highlights different ways incumbents provide AI capabilities and data as key resources for the resulting BM. Despite the hype around AI, we critically reflect that most of AI’s impact corresponds to well-known digital BM concepts (e.g., personalization). However, AI technology‘s progress might intensify the effectiveness of those BMs and spur novel opportunities within the known digital BM space.

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Jun 14th, 12:00 AM

The AI Transformation? Unpacking the Impact of AI on Incumbent Business Models

Incumbent firms feel pressured to incorporate artificial intelligence (AI) in their business model (BM) to innovate and stay competitive. While transforming the BM with digital technologies is challenging, AI adds complexity through its countless applications and incomprehensible nature. Unraveling this complexity, we develop a taxonomy to describe and analyze how AI impacts incumbent BMs. The taxonomy builds on extant literature and the analysis of 46 empirical cases. Our findings reveal AI’s roles in enhancing and transforming offerings, key operations, and financial logic. In addition, the taxonomy highlights different ways incumbents provide AI capabilities and data as key resources for the resulting BM. Despite the hype around AI, we critically reflect that most of AI’s impact corresponds to well-known digital BM concepts (e.g., personalization). However, AI technology‘s progress might intensify the effectiveness of those BMs and spur novel opportunities within the known digital BM space.

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