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Abstract: Artificial intelligence (AI) has diffused rapidly across firms and is widely viewed as a general-purpose technology with the potential to raise productivity. The effective deployment of AI is often argued to depend on complementary investments in data, yet empirical evidence on the productivity effects of data remains scarce. This paper examines how AI adoption and data investments, both separately and jointly, affect firm-level productivity. Using firm-level panel data for German firms from 2018 to 2023, we find that AI adoption is associated with an average productivity increase of approximately 6%. This effect is robust across model specifications and stable over time. Beyond the stand-alone effect of AI, our analysis shows that data investments independently contribute to productivity, with gains of 3.5 % to 3.9%. Most importantly, we find strong evidence of complementarity: firms that combine AI adoption with data investment achieve additional productivity gains of 1.7 percentage points. But our results also reveal important heterogeneity. While internally created and maintained data sources significantly increase firms’ productivity impact of AI, no complementarity effect is found between AI adoption and externally acquired data sources. These findings emphasize that realizing the full productivity potential of AI depends not only on adopting the technology itself but also on building high-quality, firm-specific data capabilities.

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