This research focuses on the formal and informal Intellectual Property (IP) protection strategies in Artificial Intelligence (AI) based business models, taking into account the challenges given by an open innovation approach. Existing literature already distinguishes between formal and in-formal protection strategies and have tried to understand their influence on value capture for different business models. However, their application to the new field of AI is still a white spot. Therefore, this research aims on how can formal and informal protection strategies be applied in the field of AI based business models, taking into account an open innovation environment that is relevant and current practice in AI based innovation regimes. The managerial implications also cover how to balance open and proprietary innovation with a focus on entrepreneurship and startup environments. Methodology: qualitative research based on own empirical resources and analysis of empirical reports.