The Impact of Artificial Intelligence on Entrepreneurial Firms

While some believe that artificial intelligence (AI) is poised to create the Fourth Industrial Revolution, others argue that AI is simply another tool firms will use to compete. We apply a theoretical framework created to examine the impact of digital transformation to test the impact of AI on young entrepreneurial firms. Using a sample of 2,714 young entrepreneurial firms across industries we examine if firms specializing in AI differed in funding, revenue, the number of founders, or employees compared to their peers. We find that firms specializing in AI secured funding rounds faster, had higher revenues, and had more employees than non-AI firms. We failed to find significant relationships regarding differences in founding team size.