Artificial Intelligence (AI) technologies are reshaping the business landscape, yet many firms fail to realize their potential due to organizational, cultural, and ethical challenges. Addressing these gaps, this study introduces the concept of Responsible AI Competencies (RAIC), defined as “an organization’s competencies to leverage AI systems to achieve favorable outcomes while adhering to ethical standards and responsible use.” Integrating stakeholder theory, we investigate the mechanisms through which RAIC fosters long-term organizational benefits, emphasizing diverse stakeholders’ engagement and trust. Our research advances the literature by bridging responsible AI and technology competency frameworks, conceptualizing RAIC, and exploring its strategic implications. By uncovering mediating pathways, we highlight how RAIC can drive sustainable competitive advantages while addressing ethical concerns in AI deployment. The findings offer significant theoretical contributions and practical insights, guiding firms to develop and utilize RAIC to achieve lasting success in the evolving AI landscape.