AI Innovation and Bank Performance: Evidence from Patent Activity of Large U.S. Commercial Banks

This paper examines the relationship between artificial intelligence (AI) innovation and bank performance, the organizational channels through which these relationships operate, and the role of firm-wide adoption in shaping outcomes. Using patent-based measures of AI innovation for 31 large U.S. commercial banks from 2015 to 2024 based on the Federal Reserve’s Large Bank classification and employing panel regressions with bank and year fixed effects, we find that AI innovation is associated with