This study investigates the impact of Generative Artificial Intelligence (GenAI) on the dynam-ics and performance of innovation teams during the idea generation phase of the innovation process. Utilizing a custom AI-augmented ideation tool, the study applies the Knowledge Spill-over Theory of Entrepreneurship to understand the effects of AI on knowledge spillover, gen-eration and application. Through a framed field experiment with participants divided into exper-imental and control groups, findings indicate that AI-augmented teams generated higher quali-ty ideas in less time. GenAI application led to improved efficiency, knowledge exchange, in-creased satisfaction and engagement as well as enhanced idea diversity. These results high-light the transformative role of the field of AI within the innovation management domain and shows that GenAI has a positive impact on important elements of the Knowledge Spillover Theory of Entrepeneurship, emphasizing its potential impact on innovation, entrepreneurship, and economic growth. Future research should further explore the dynamic interaction be-tween GenAI and creative processes.
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