The emergence of big data analytics (BDA) and artificial intelligence (AI) offers hospital departments new opportunities to enhance service performance and the quality of care. However, the specific role of BDA-driven AI capabilities in driving innovation ambidexterity, the ability to simultaneously explore new ideas and exploit existing ones, remains unclear. Thus, our work investigates how BDA-driven AI capabilities influence innovation ambidexterity and, in turn, enhance service performance at the departmental level. In doing so, we use survey data from 118 Dutch hospital departments and analyze it using partial least squares structural equation modeling (PLS-SEM). We find that BDA-driven AI capabilities have a positive impact on the innovation ambidexterity of hospital departments, which subsequently enhances service performance. Supplementary analysis using two-step qualitative comparative analysis (QCA) confirms our main findings and offers additional insights on the unique roles of BDA-AI capabilities and innovation ambidexterity in driving service performance. The results are also confirmed through robustness checks using alternative measures of ambidexterity and alternative methods of analysis. This research adds to the extant literature by offering valuable insights into how hospital departments could drive service performance while leveraging their BDA-driven AI capabilities that foster innovation ambidexterity.