The impact of artificial intelligence capabilities on servitization: The moderating role of absorptive capacity-A dynamic capabilities perspective

The advent of artificial intelligence (AI)-based technologies has opened new opportunities for manufacturers to maintain their technological edge and address pressing societal challenges. This research investigates the nature of the relationships between AI capabilities, servitization, and the role of absorptive capacity. Building on dy-namic capabilities literature, we developed and empirically tested a model using structural equation modeling (SEM) and further applied a fuzzy-set qualitative comparative analysis (fsQCA). Through the construct of AI capabilities and its four sub-dimensions, we find supportive evidence from our model estimates employing data from 185 manufacturing firms in the US and EU. The study findings highlight the positive impact of AI capa-bilities on servitization; this relationship is positively moderated by absorptive capacity. Furthermore, the road to servitization is through advancing AI capabilities related to internal process and resource optimization coupled with AI for social innovation services. The study's theoretical and pragmatic implications are discussed.