AI influences product design and innovation by enabling a data-driven approach to understanding user preferences and market needs. Through machine learning algorithms, companies can analyze vast datasets to identify trends and patterns, informing design decisions. AI tools can also automate tedious design processes, allowing human designers to focus on creativity and innovation. Furthermore, AI-driven simulations help in testing products before launch, resulting in more refined and targeted innovations. As a result, AI not only enhances the efficiency of the design process but also fosters the creation of products that better meet customer demands.