This paper explores how industrial organisations understand their competencies in relation to AI transformation. It does so by using data from a collaborative research project with five industrial partners. The paper complements current research on AI transformation by explicating how industrial organisations understand technical and managerial competencies related to AI. The paper proposes a new two-dimensional conceptual framework that attempts to capture the complexity industrial organisations face when trying to relate their managerial efforts to their technical ones in the AI transformation process.