This paper studies the impact of AI technology on the mutual fund industry. I develop a new measure of AI adoption based on hiring practices and find that this measure can predict fund performance. The funds with high AI ratio outperform non-AI funds, after I controlling for standard factors and fund characteristics. Further empirical evidence shows that funds with a high AI ratio tilt their portfolios toward high information intensity stocks, indicating that mutual funds benefit from AI technology adoption by improving their information capacity. Consistent with this channel, I find that the outperformance of these mutual funds mainly comes from better stock picking skills. Finally, AI technology adoption has a negligible effect on fund manager turnover.