The growth of Artificial Intelligence (AI) has important implications for business in general and innovation in particular. Ideation is the start of the innovation process. The authors review three fields of AI in ideation: identification and analysis of new opportunities, idea generation, and idea screening and idea selection. The results of the review are as follows. First, whereas in the past researchers highlighted the importance of industry characteristics and market stability, the authors now emphasize the importance of firm culture in driving innovation. AI will mediate this relationship. Second, across all stages, AI will improve efficiency, speed, and cost of ideation. Third, in opportunity identification, considerable progress has occurred in analyzing text and image; research on video and audio is relatively scarce. Fourth, in idea generation, AI increases the average creativity of ideas; however, the effect of AI on the generation of top ideas is conflicting. Fifth, AI assists very well in idea screening, but does not do a good job yet in idea selection. Sixth and most importantly, research remains in the early stages and will rapidly improve in the future. Thus, AI has the potential to radically transform ideation.

Practitioner Points

• While past research emphasizes the importance of market stability, industry characteristics, and firm culture in shaping radical (vs. incremental) innovation, the role of firm culture is expected to become even more critical in the age of AI. This is because AI will influence the relationship between firm culture and radical (vs. incremental) innovation. Therefore, managers should focus on building a culture that fosters innovation.
• In the early stages of the ideation process:
  • AI enhances the speed, efficiency, and cost-effectiveness of ideation. Managers should leverage AI tools to accelerate and scale the ideation process. They should stay adaptive because AI in ideation evolves rapidly.
  • AI improves the average creativity of generated ideas, but research is conflicting on whether it enhances the creativity of top ideas. Unless conclusive evidence shows that AI outperforms humans for all types of innovation, managers should continue to identify exceptional human talent.
  • AI performs well in idea screening but to date fails to deliver convincing results in idea selection. Managers should combine AI-driven insights with human judgment to ensure that they do not overlook high-quality ideas.