How can artificial intelligence capabilities empower sustainable business model innovation? A dynamic capability perspective

Purpose This study attempts to employ a dynamic capability perspective to delve into the effects of artificial intelligence capabilities on sustainable business model innovation, while considering strategic agility as a mediator and environmental dynamism as a moderator. Design/methodology/approach This study employed the partial least squares-structural equation modeling (PLS-SEM) and the fuzzy-set qualitative comparative analysis (fsQCA) methodologies to conduct the empirical analysis of the data from 337 Chinese firms. Findings The results reveal that artificial intelligence capabilities contribute positively to sustainable business model innovation, which is mediated by strategic agility. Additionally, environmental dynamism strengthens the impact of artificial intelligence capabilities on resource fluidity. Practical implications Firms should prioritize the enhancement of artificial intelligence capabilities to leverage their role in sensing opportunities. Meanwhile, they should deploy strategic agility and monitor competitive environment to better seize the sensed opportunities. Originality/value First, this study takes the capability perspective of artificial intelligence to examine its impact on sustainable business model innovation. Second, this study reveals the inner mechanisms between artificial intelligence capabilities and sustainable business model innovation by investigating the mediating role of strategic agility. Third, this study clarifies boundary conditions for the relationship between artificial intelligence capabilities and strategic agility by examining the moderating role of environmental dynamism.