Characterizing the Form and Magnitude of AI Innovations

Department of Decision Sciences and Managerial Economics

Although the prevalence of artificial intelligence (AI) innovations is on the rise, there is still salient ambiguity about their technological nature and the implications this has for underlying assumptions when managing and organizing AI innovations. To address this issue, we follow the Schumpeterian tradition and characterize the nature of AI innovations based on two dimensions—the form and the magnitude of innovation. Through a comparative analysis of patented AI and non-AI innovations, we find robust evidence that AI innovations are significantly less radical and more process-oriented than other similar technological innovations. We discuss the theoretical implications of our findings and provide suggestions related to the management and organizing logic of AI innovation.