AI capability and product innovation intensity: Driving B2B marketing innovation under varying levels of market turbulence

In increasingly volatile markets, firms are turning to artificial intelligence (AI) to enhance innovation and maintain a competitive edge. However, many organizations continue to struggle to translate AI investments into meaningful innovation outcomes. This study develops and empirically tests a framework examining how AI capability is transformed into business-to-business (B2B) marketing innovation through organizational agility and product innovation intensity. Drawing on survey data from 239 Chinese firms, the findings reveal that AI capability drives B2B marketing innovation through a theorized sequential relationship, in which organizational agility enables intensified product innovation, which in turn supports market-facing innovation. Furthermore, market turbulence acts as a contingent boundary condition, amplifying the effects of AI capability on product innovation intensity and downstream innovation outcomes, while not significantly affecting its relationship with organizational agility. By conceptualizing AI capability as an enabling capability architecture that activates sensing, seizing, and reconfiguring processes, this research advances dynamic capability theory and provides a more granular explanation of how AI is translated into innovation. It also distinguishes between innovation generation (product innovation intensity) and innovation realization (B2B marketing innovation), offering a process-based account of capability-to-innovation transformation. The study provides actionable insights for managers on developing integrated AI capability, enhancing organizational agility, and strategically intensifying innovation efforts under varying levels of market turbulence.