Paradoxes and Coping Practices in AI Servitization: An Exploratory Study of Four Chinese Manufacturers

New digital technologies are rapidly changing how companies do business. The latest wave of artificial intelligence (AI) technologies is further boosting this process, especially among high-tech manufacturers, leading to new opportunities for new service-oriented business models. In this paper, we refer to this process as “AI servitization” (i.e., artificially intelligent servitization). Moreover, while AI offers many opportunities, it also brings new challenges for companies. The purpose of this paper is to further explore these issues. Based on a comparative case study of four Chinese high-tech manufacturing firms, we develop theory on AI servitization and its associated paradoxes and coping practices. Methodologically, we first perform within-case analyses, zooming into each manufacturer in detail, followed by a cross-case analysis where we compare the cases on the study's selected key issues (i.e., types of services and AI technologies, paradoxes, and coping practices). Theoretically, we propose a two-dimensional framework considering manufacturers' service focus (i.e., product-oriented vs. customer process-oriented) and the architecture (i.e., modular vs. integral) of their AI-based products and associated platforms, unveiling four “ideal” types of AI servitization. Next, we discuss four types of paradoxes-namely, economic, technological, organizational, and institutional-encountered by the studied firms as well as the practices that they deploy to cope with them. The insights generated from this study offers practical implications for managers to pinpoint their current AI service position and think of future innovation pathways, and for researchers to further develop the research field of AI servitization.