Which Companies Are Betting on Artificial Intelligence?

Firms leading the AI race are often assumed to be financially stable giants with deep pockets, predictable revenues, and the capacity to experiment with emerging technologies. AI development is indeed costly, uncertain, and risky. It requires long-term strategic thinking, specialized talent, and substantial investment, all without any guarantee of success.

In recent research conducted with colleagues at the University of Urbino (Italy), we show that the companies most likely to innovate in AI are not necessarily the most financially secure. In fact, firms facing greater financial uncertainty, measured in terms of liquidity volatility, may be more inclined to pursue AI innovation (see Bacchiocchi et al. 2026).

In periods of rapid technological transformation and economic turbulence, some firms respond by taking even greater technological risks, betting on the potential gains offered by new technologies. In this context, AI becomes more than a tool for efficiency or automation; it becomes a strategic wager on the future.

We examine the patenting activity of more than 28,000 Italian firms between 2012 and 2019, investigating whether financial risk influences a company’s decision to innovate in AI. This period predates the launch of ChatGPT and other generative AI systems, when the potential of AI, that was largely predictive at the time, remained mostly latent and uncertain for many firms.

Our analysis yields novel insights into modern innovation strategies. We find that firms experiencing higher cash-flow volatility are significantly more likely to file AI-related patents. In other words, companies already accustomed to operating under financial uncertainty appear more willing to embrace one of the most uncertain technologies of our time.

Standard economic theory suggests that firms facing unstable liquidity should delay risky projects, preserve cash, and avoid long-term commitments. Yet our findings indicate that such firms may instead be better equipped, or more willing, to manage the uncertainty associated with AI.

After all, AI development is not comparable to producing a new machine or incrementally improving product customization. Much of its value lies in intangible assets such as software, algorithms, and data systems, whose returns are inherently difficult to quantify.

Moreover, AI projects often involve uncertain timelines and unpredictable outcomes. A firm may invest substantial resources in AI innovation without knowing whether the technology will eventually deliver commercial success. In many cases, companies are effectively betting on possibilities rather than expected returns.

Despite these challenges, our results suggest that financial volatility does not necessarily discourage innovation. Instead, for some firms, uncertainty appears to foster bold strategic behavior.

To understand why, it is useful to consider how firms respond to unstable environments. When faced with uncertainty, companies typically adopt one of two approaches.

The first is defensive. Management may cut costs, reduce hiring, postpone investments, and prioritize short-term survival. This is a common response during recessions or periods of instability.

The second is more aggressive. Rather than retreating, some firms attempt to innovate their way out of uncertainty by investing in new technologies, exploring emerging markets, and taking strategic risks to gain a competitive advantage ahead of rivals.

Our findings suggest that AI particularly attracts this second type of response, as it represents a fundamental opportunity to strengthen firm competitiveness. Successful AI innovation can reduce costs, improve productivity, generate new revenue streams, and enable entirely new products and services. Crucially, early success in AI can also secure a lasting advantage in industries where technological leadership is increasingly decisive.

This helps explain why financially volatile firms may view AI not only as a “high-risk, high-reward” technology, but also as a strategic necessity. Unlike more mature digital technologies, AI remains highly exploratory. Its applications are still evolving rapidly, and firms often invest without fully understanding where the technology will ultimately lead. This may explain why the relationship between financial risk and innovation appears to be specific to AI. When we compare AI with other technological fields, such as ICT and Industry 4.0 technologies, the results differ markedly. Financial volatility has a much weaker effect on Industry 4.0 innovation and virtually no effect on ICT-related patenting.

This distinction is important, as it suggests that firms under financial pressure are not simply becoming “more innovative” in general. Rather, they appear selectively drawn to frontier technologies with potentially transformative returns. Established technologies typically come with clearer business models and more predictable outcomes. Firms know how to implement them and can more easily assess their value. AI, by contrast, remains at the technological frontier.

The speed of AI development further amplifies this effect. New breakthroughs emerge continuously, industries are being reshaped at unprecedented pace, and firms increasingly fear falling behind. This might create a dual dynamic of excitement and anxiety: companies recognize AI’s potential to transform competitiveness, but also the risk of becoming obsolete if they delay adoption.

Another important dimension of our study concerns organizational culture. Firms accustomed to volatility may develop traits that make them more comfortable with experimentation. Operating under uncertainty often forces organizations to adapt quickly, tolerate failure, and make faster decisions. These capabilities can be particularly valuable when engaging with emerging technologies such as AI.

By contrast, more stable firms may become increasingly conservative over time. Predictable success can reinforce bureaucratic structures, caution, and risk aversion. This does not imply that stable firms cannot innovate, but rather that firms already experienced in managing uncertainty may hold certain organizational and psychological advantages in frontier technological competition.

More broadly, the study aligns with a historical pattern in which major technological revolutions are not driven solely by the most stable or well-established firms. Periods of disruption often create opportunities for organizations willing to embrace uncertainty.

The rise of the internet in the 1990s, for instance, rewarded firms that experimented aggressively while others hesitated. Many early entrants failed, but those that succeeded reshaped the global economy. AI may represent a similar turning point.

Today, firms operate in a rapidly changing environment shaped by automation, digital transformation, geopolitical instability, and shifting consumer behavior. In such a context, standing still may itself become a source of risk. For some firms, AI innovation is not only about growth, but about maintaining long-term relevance in a world where technological capability increasingly defines competitive success.

Ultimately, our study challenges a deeply rooted assumption in economics and management: that uncertainty suppresses innovation. Instead, it suggests that under certain conditions, uncertainty may actually stimulate firms to pursue bold technological strategies. This insight is particularly relevant in the age of AI. As artificial intelligence continues to reshape industries, the firms most willing to navigate uncertainty, embrace experimentation, and take strategic risks in pursuit of future opportunities are likely to take the lead.

Andrea Bacchiocchi & Germana Giombini & Ludovica Segneri & Francesco Venturini, 2026. "Financial risk and technology shifting: Firm-level evidence from the rise of AI," Mo.Fi.R. Working Papers 199, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.