The Impact of Artificial Intelligence Investment on Market Value: An Event Study

In recent decades, many firms have invested in artificial intelligence (AI) and used them in business applications across industries. However, understanding of the impact of AI on firm value is limited. In this study, 67 AI investment announcements of 42 listed firms were analyzed by adopting the event study methodology. Results reveal that AI investment has a negative impact on a firm’s market value, as the stock price of the firms decreased by 1.77% on the day of the announcement. The result also shows that comparing with stable market environment, investors response more negatively to AI investment announcements under unstable market environment.