Innovating in Shifting Landscapes: Digital Innovation in the Era of Generative AI

Emerging technologies such as generative AI challenges our current understanding of digital innovation, which addresses recombination of physical and digital components into novel products. These technologies introduce dynamic and evolving capabilities that disrupt existing possibilities, what actors imagine to be feasible, valuable, or achievable. Through an 18-month longitudinal case study of an international legal firm developing an AI assistant, we observed how spaces of possibilities shift under external technological disruption, and identified core phases of innovation – surfacing new possibilities, shifting space of possibilities, and actualizing selected possibilities – through which actors envisioned and actualized emerging possibilities where distinct versions of AI evolved. Our study contributes to organizing logic of digital innovation in rapidly evolving technological landscapes, by showing how ongoing disruption during innovation shifts space of possibilities and drives iterative cycles of surfacing, shifting and actualizing new possibilities.