This study investigated the institutional factors affecting the application of Artificial Intelligence (AI) by American companies. The objectives of the study were to: 1) determine the institutional factors affecting AI; 2) evaluate the impact of institutional factors on application level of AI; and 3) assess the impact of AI on organizational competitiveness. This study adopted a survey research design. The population of the study is comprised of all publicly quoted companies on NASDAQ (National Association of Securities Dealers Automated Quotations). Data collection was aided by structured questionnaire. In line with the 10% rule of thumb for large population size, 330 companies were taken as the sample size for the study. The 330 companies were randomly selected, and a copy of questionnaire dispatched to each company, making a total of 330 copies of questionnaire administered. Result shows that the relatively high-ranking institutional factors affecting AI application are Competitors' activities, Consultants/Professional bodies, actions of Multinational organizations, and the need to satisfy customers. A thematic analysis of the high-ranking factor shows that the mimetic factors (i.e., competitors' activities and actions of multinational organizations) are the strongest factors driving the application of AI by the companies. The normative factor (i.e., recommendations of consultants/professional bodies/experts) also has appreciable influence on AI application. Result also shows that institutional factors jointly account for an appreciable level of AI application in American companies. Result suggests that the application of AI has a significantly positive impact on organizational competitiveness. This makes it compelling to encourage investment in AI given its significantly positive impact on organizational competitiveness. The study contributes to knowledge by providing em-How to cite this paper: Iwuanyanwu, C. C.