Does AI-infused operations capability enhance or impede the relationship between information technology capability and firm performance?

The IT literature suggests that information technology capability (ITC) enhances firm performance. Yet studies have challenged this positive relationship. This study proposes an inverted U-shaped ITC–performance relationship and investigates how artificial intelligence-infused operations capability (AIOP) moderates this inverted U-shaped relationship. We collect data from 259 U.S. and 279 Chinese companies to test the hypotheses and find some interesting, but counterintuitive, results. This study extends the IT and strategic management literatures by examining how AIOP moderate an inverted U-shaped ITC–performance relationship. The study also reveals some cross-national similarities and differences.