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The presence of generative AI in educational settings can prove useful if its advantages are leveraged by teachers. This action research explores how kindergarten teachers can make use of generative AI to co-create a picture book for children. The creation of this book was an innovative conclusion to an immersive experiential learning unit on culture. The children were invited to participate by drawing the illustrations and reading the story aloud for the audio recording. Through two cycles of action research, the study found that intentional use of generative AI can spark innovation through the co-creation of an e-book by teachers and students. The findings indicate that teacher literacy in generative AI can open up new avenues in learning and teaching.