This paper sheds light on the different ways firm innovation can be impacted by human capital with Artificial Intelligence (AI) knowledge. Aside from scholarly work on Artificial Intelligence (AI) and displacement of labor and human capital, this study is among the first to examine how changing a firm’s knowledge repositories by developing human capital with Artificial Intelligence (AI) exposure can impact its innovation. My intention for this paper is to develops a theoretical basis for innovation enhancing and innovation limiting effects of human capital with Artificial Intelligence (AI) exposure. Specifically, I challenge the assumption that Artificial Intelligence (AI) knowledge will always be beneficial to a firm’s innovation. Using a dataset of 719 firms from different industries spanning a 9-year period, I find support for my model. My findings offer enhanced guidance to scholars and practitioners who are concerned about the impact of human capital with Artificial Intelligence (AI) knowledge on firm level innovation.
