Artificial Intelligence (AI) has become a transformative force in business model innovation (BMI), allowing firms to sense opportunities, seize competitive advantages, and reconfigure their strategies in dynamic environments. This review paper This study examines how Artificial Intelligence (AI) reshapes Business Model Innovation (BMI) by extending Dynamic Capabilities Theory (DCT). It introduces the AI-Driven Dynamic Capabilities Model (AIDCM), which conceptualizes AI’s role in sensing, seizing, and transforming business opportunities. The study also addresses ethical and governance challenges arising from AI-driven transformations.
Artificial Intelligence (AI), Business Model Innovation (BMI), Dynamic Capabilities Theory (DCT), AI-Driven Transformation, Strategic Agility, Ethical AI Governance