The integration of artificial intelligence (AI) into business operations is a critical driver of digital innovation and a firm’s ESG performance. This study examines the impact of AI on digital innovation and ESG performance within the Turkish service and manufacturing sectors, with a focus on underrepresented groups, including women and immigrants. This study uses structural equation modeling (SEM) to examine how AI influences ESG performance through the mediating roles of team collaboration, creative mindset, and team structures. Empirical findings reveal that AI significantly enhances digital innovation and organizational performance by fostering a creative mindset and promoting team collaboration among employees. However, the impact of AI on team structures did not show significant results concerning a firm’s ESG performance. The study highlights the role of AI in fostering a more inclusive and collaborative work environment. It contributes to understanding AI’s role in promoting diversity and inclusion, thus enhancing organizational innovation and its ESG performance. The study’s findings suggest that the Turkish service and manufacturing sectors should promote strategic AI integration and inclusive practices to achieve sustainable growth and competitive advantage.
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