Digital transformation is forcing companies to adapt their existing business models to new technological developments and market requirements. A significant challenge is the effective application of innovation digital technologies to enhance operational efficiency and achieve competitive advantage. This paper investigates the impact of digitalization and artificial intelligence (AI) on business models, highlighting the key success factors for transformation and addressing the challenges arising throughout the process. Empirical insights from semi-structured interviews with relevant actors from the research and practice are presented in this paper. The Gioia method was used to analyse the interview data in order to obtain a meaningful data structure. The findings identify three primary aggregate dimensions that influence the transformation of business models, namely operational efficiency and technological feasibility, organizational culture change, and strategic competitiveness and future security. Digital technologies have the potential to increase efficiency and facilitate the transformation of existing business models. However, challenges related to data management, process optimization and cost concerns are faced by companies. In addition, the digital transformation process is frequently accompanied by a cultural shift that is often accompanied by unrealistic expectations, resistance to change, and identified skills gaps. This necessitates effective leadership and change management to facilitate the navigation of these obstacles. Moreover, AI can serve as a powerful competitive advantage, facilitating scalable innovation. These technological, cultural and strategic factors require addressing in order to facilitate the successful integration of AI in a company’s transformation strategy.