Artificial intelligence, privacy utility and perceived legitimacy: the nonlinear moderating effect of knowledge

Privacy is a critical concern in the AI era, yet its impact remains underexplored in public service delivery. This study develops a moderated mediation model, where privacy utility mediates the relationship between decision-makers (AI, human-AI collaboration, humans) and perceived legitimacy, with AI knowledge nonlinearly moderating this relationship. A vignette experiment was used to investigate causality, with 512 participants recruited from China. It finds that AI’s privacy utility is lower than human services due to higher privacy risks without additional privacy benefits, while human-AI collaboration mitigates these risks. The effect of AI on legitimacy is fully mediated by privacy utility, with subjective AI knowledge moderating the relationship in a U-shaped pattern. These findings provide a nuanced understanding of privacy in the AI context, linking it to legitimacy and underscoring the importance of AI knowledge.