AI as a Cognitive Partner: Investigating Knowledge Augmentation and Its Role in Digital Transformation Outcomes

This study investigates the impact of AI augmentation level on employee productivity and innovation quality, while examining the mediating role of knowledge augmentation quality and the moderating roles of task complexity and employees’ trust in AI. The research aims to uncover how AI can act as a strategic cognitive enhancer rather than a mere automation tool in modern workplaces. A quantitative, cross-sectional design was employed, and data were collected from 275 employees working in AI-enabled organizations across the technology, banking, telecommunications, and digital services sectors in the Kingdom of Saudi Arabia. Validated measurement scales from prior studies were used, and SmartPLS was applied to test direct, mediating, and moderating effects. The results confirmed that AI augmentation positively influences both employee productivity and innovation quality. Knowledge augmentation quality significantly mediated these relationships, while task complexity and employee trust in AI positively strengthened the impact of knowledge augmentation on performance outcomes. This study extends the AI literature by demonstrating that AI’s true value lies in enhancing the quality of knowledge that employees receive, not just automating tasks. It offers theoretical insight into human–AI collaboration and provides practical guidance for designing AI systems that enhance cognitive support, trust, and performance in intelligence-driven work environments.