PurposeThis study aims to predict artificial intelligence (AI) technology development and the impact of AI utilization activity on companies, to identify AI strategies dealing with the broad innovation activity of AI, and to construct the strategic decision-making framework of AI strategies for a small- and medium-sized enterprise (hereafter SME), to improve strategic decision-making practices of AI strategy in SMEs.Design/methodology/approachThis study used the multiple methods on the design of two data collection stages. The first stage is an expertise-based approach. It organized the three groups of expert panels and conducted the Delphi survey on them in combination with the brainstorming of technology, innovation and strategy in the fourth industrial revolution. The second stage is in the complement approach of expertise-based results. It used the literature review to involve the analysis of academic and practical papers, reports and audio materials relating to technology development, innovation types and strategies of AI. Additionally, it organized the four semi-structured interviews. Finally, this study used the mind-map and decision tree to conduct each analysis and synthesize each analytical result.FindingsThis study identifies the precondition and four paths of AI technological development classifying into specialized AI, AI convergence with other technologies, general AI and AI control methods. It captures the impact of non- and technological innovation through AI on companies. Second, it identifies and classifies the six types of AI strategy: the bystander, capability-building, capability-holding, management-enhancing, market-enhancing and new-market-creating strategy. By using the decision tree, it constructs the strategic decision-making framework containing six AI strategies. Actionable points, strategic priorities and relevant instruments are suggested.Research limitations/implicationsThe strategic decision-making framework covering from AI technology development to utilization in a SME can help understand the strategic behaviours in SMEs. The typology of six AI strategies implies the broad innovation behaviours in SMEs. It can lead to further research to understand the pattern of strategic and innovation behaviour on AI.Practical implicationsThis practical study can help executives, managers and engineers in SMEs to develop their strategic practices through the strategic decision framework and six AI strategies.Originality/valueThis practical study elicits the six types of AI strategy and constructs the strategic decision-making framework of six AI strategies from AI technology development to utilization. It can contribute to improving the practices of strategic decision-making in SMEs.