AI in New Product Development: Opportunities, Applications, and Managerial Implications

New Product Development (NPD) requires multidisciplinary collaboration between internal (e.g., designers, engineers, project managers) and increasingly external stakeholders (e.g., customers). These collaborations aim to create new products that meet market needs, deliver value to customers and end-users, and generate revenue for firms. However, the rate of NPD failure is high with traditional NPD often facing significant challenges that can limit productivity and product innovation performance; these include lengthy development cycles and limited market insights. In this context, Artificial Intelligence (AI) has emerged as a potential collaborator for NPD teams. Much like the emergence of rapid prototyping in the 1980s, which is now widely accepted as a standard NPD tool in most engineering firms, AI promises to revolutionize NPD by improving decision-making, reducing development time, and providing deeper market insights. This paper examines the current state of AI in NPD, reviewing its application across various industries and at different stages of the NPD lifecycle. In addition, the paper outlines some of the key implications of AI adoption for technology and engineering managers, emphasizing the need for AI infrastructure investment, regulatory compliance, strategic planning and cultural change, cross-functional collaboration and stakeholder engagement, and employee development.