The effect of implementing chatbot customer service on stock returns: an event study analysis

Advancements in conversational Artificial Intelligence (AI) have led to rapid growth in firms’ use of AI chatbots in customer service roles. While the shareholder wealth effects of AI chatbots have yet to be investigated, recent findings suggest that AI investment may contribute negatively to firm value. This cautionary evidence, and the growing prevalence of AI chatbots, underscore that a clear understanding of their impact on firm value is urgently needed. An event study of 153 AI chatbot announcements demonstrates that implementation of AI customer service chatbots generates a .22% abnormal stock return, indicating investors respond favorably to this practice. Importantly, B2B (vs. B2C) firms have substantially more to gain from implementing AI chatbot customer service. However, we find chatbot anthropomorphism interacts with customer type, as investors respond less (more) favorably to anthropomorphized chatbots used in B2B (B2C) customer service roles. Two additional studies provide support for this pattern of findings.