This study presents a comprehensive framework for integrating Artificial Intelligence (AI) into structured innovation processes, focusing on Open Innovation and New Product Development. Through a systematic literature review of 53 peer-reviewed articles (2022–2024) and extensive secondary research identifying 218 AI models and techniques, the research introduces the “AI for Innovation” diagram—a novel conceptual framework aligning AI capabilities with specific innovation phases. The findings reveal AI’s increasing application across all innovation stages, from idea generation to post-launch analysis, with roles ranging from creative “Originator” to supportive “Facilitator”. The study categorises AI technologies into 19 main categories and maps their applications to different innovation phases, providing a structured guide for organisations. Key insights include AI’s transformative role in enhancing knowledge transfer throughout the innovation process, from facilitating data analysis and insight generation to enabling personalised learning and automated knowledge documentation. This study bridges the gap between theoretical AI capabilities and their practical application in innovation, providing actionable insights for firms to enhance innovation capabilities, accelerate development cycles, and gain competitive advantage in an AI-driven business landscape.