Artificial Intelligence (AI) promises to have a transformational impact on our economy and society. It offers the opportunity for digital innovation, as it can be embedded in products and services. However, although companies are adopting AI, success stories are limited. Similarly, research on how to realize digital innovation from AI is scarce. To analyze the role of AI for digital innovation and how it affects the venture creation process, we conduct an in-depth case study at a heavily-funded medical imaging AI company. Our case study reveals four AI-caused tensions, which a digital venture faces, and we discuss four ways in which it counters them: (1) Managing Over-Expectations of AI, (2) Designing Work Routines for AI, (3) Addressing Opposing User Perceptions of AI, and (4) Integrating Domain Expertise with AI. Ultimately, we hope to contribute to the understanding of digital innovation in the context of AI.