2025, Vol. 6, Special Issue 2

Digital transformation is now a crucial focus for companies aiming to keep up with the growing tech-centric environment. The adoption of digital tools across all areas of an organization fundamentally changes operations and how value is delivered to customers. The impact of artificial intelligence (AI) is transforming business processes, improving efficiency, driving innovation, and enhancing competitive advantages. In the current rapidly evolving market, embracing digital transformation driven by AI has transitioned from being an optional enhancement to an essential strategy for organizations wishing to remain pertinent.

Artificial Intelligence (AI) is crucial in propelling digital transformation forward by improving automation, data analysis, customer interactions, and overall operational productivity. Despite the significant potential that AI offers, it also brings challenges, including ethical dilemmas, complexities in integration, and the risk of workforce displacement. This paper explores the impact of AI on digital transformation and examines key opportunities for businesses, such as streamlining automation, improving decision-making, and optimizing operational processes. Despite the significant potential that AI offers, it also brings challenges, including ethical dilemmas, complexities in integration, and the risk of workforce displacement. This paper explores the impact of AI on digital transformation and examines key opportunities for businesses, such as streamlining automation, improving decision-making, and optimizing operational processes. It has also aided businesses in boosting effectiveness, sparking innovation, and intensifying competition. Furthermore, it investigates the challenges organizations encounter when integrating AI, including ethical issues, data protection challenges, and skill shortages. It additionally looks into barriers such as elevated implementation expenses, concerns regarding data privacy, and deficits in skill sets. By reviewing case studies and industry patterns, this research offers valuable perspectives on how companies can strategically weave AI into their digital transformation efforts.