How industrial foundation models drive interconnected innovation among large, medium and small enterprises in China

Purpose This paper aims to examine, from a knowledge management perspective, how industrial foundation models enable interconnected innovation among large, medium and small enterprises and illustrates these mechanisms through Chinese business cases. Design/methodology/approach Guided by the knowledge-based view, this paper adopts a theory-building design with case illustration. It identifies four major knowledge bottlenecks constraining interconnected innovation among large, medium and small enterprises, develops an explanatory framework drawing on key knowledge management theories, and uses four Chinese industrial foundation model cases to illustrate the proposed mechanisms and their managerial relevance. Findings The study finds that industrial foundation models function as cross-organizational knowledge infrastructures that enable interconnected innovation across firms of different sizes. Specifically, they support this process through four interrelated pathways, namely platform-based knowledge integration, tacit knowledge externalization, scenario-based knowledge orchestration and trustworthy knowledge governance. Through these pathways, firms can move from data interconnection to knowledge co-creation. Research limitations/implications This paper extends knowledge management research from intra-firm knowledge processes to knowledge collaboration across organizations of different sizes. It also integrates cross-organizational knowledge integration, tacit knowledge externalization, knowledge absorption and orchestration and knowledge governance into a unified analytical framework for understanding how industrial foundation models support interconnected innovation. Practical implications Large enterprises should act as knowledge organizers and scenario openers, medium-sized enterprises should strengthen specialized scenario capabilities and network embeddedness, and small and medium-sized enterprises should accelerate capability upgrading through modular knowledge tools and intelligent agents. Such role differentiation can support value co-creation and improve interconnected innovation performance. Originality/value From a knowledge-based view, this paper explains how industrial foundation models reshape knowledge connection, transformation, orchestration and governance across firms of different sizes, and offers practice-based insights from China into how large, medium and small enterprises can advance interconnected innovation.