Abstract: As artificial intelligence (AI) technology becomes increasingly prevalent, the awareness of AI shock, particularly among Generation Z employees is exerting a growing influence on their proactive innovation behavior. Grounded in the Conservation of Resources Theory and the Stress Cognitive Appraisal Theory, this study investigates the mechanisms through which AI shock awareness impacts the proactive innovation behavior of Generation Z employees. Using questionnaire surveys, the research introduces job insecurity, work thriving and error tolerance dynamics as psychological resource, work state variables, and organizational culture variable to construct a moderated chain mediation model. The findings reveal that: (1) AI shock awareness positively influences Generation Z employees’ proactive innovative behaviors; (2) Job insecurity and work thriving sequentially mediate the relationship between AI shock awareness and proactive innovative behaviors; (3) Organizational error tolerance dynamics positively moderate the relationship between work thriving and proactive innovative behaviors; and (4) Error tolerance dynamics enhance the chain mediation effect of job insecurity and work thriving in the relationship between AI shock awareness and proactive innovative behaviors. Based on these results, the study proposes strategies to foster proactive innovation among Generation Z employees, including guiding their engagement with AI technology, establishing dynamic learning systems, and cultivating organizational cultures with high error tolerance dynamics.