This study explores the role of artificial intelligence (AI) as an enabler of innovation as well as its adoption by start-ups. This important dual function of AI represents possibly a paradigm shift in the means of promoting and carrying out business model innovation and indeed the introduction of new value offerings. It concentrates on the impact of AI on product design, marketing and operation. This paper demonstrates the transformational impact that AI technologies such as Machine Learning and AI-based analysis can have on product development, commercialization, efficiency enhancement of company processes and speed to market by reviewing some literature and case studies. It also discusses the benefits and challenges that companies can obtain from AI and the importance of strong implementation strategy. Against challenges which include high cost of implementation and data privacy concerns, businesses are expanding as a result of the competitive advantages caused by AI that include better market reach and customization.