This study investigates the influence of Artificial Intelligence (AI) on digital innovation using a SmartPLS approach, analyzing data from 156 observations. AI has become a powerful driver of innovation, reshaping organizational processes and outcomes across various sectors. The research explores the relationships between AI adoption and digital innovation outcomes, focusing on process efficiency, product quality, and service creativity. Findings reveal significant correlations, highlighting AI's role in enhancing organizational readiness, technological integration, and data quality. The study emphasizes the importance of fostering an innovation culture and implementing effective change management strategies to fully leverage AI-driven digital transformation. The SmartPLS model is validated through high R-Square and path coefficient values, confirming the validity of the research hypotheses. The study contributes to a deeper understanding of AI's mechanisms in influencing digital innovation, offering actionable insights for businesses, policymakers, and researchers. Key findings include the significant influence of organizational readiness on technological integration, which in turn affects data quality and accessibility. Innovation culture is found to positively influence change management strategies, facilitating successful AI adoption. The study also highlights the robustness of the SmartPLS model in explaining the variance in intermediary variables, confirming the reliability and validity of the measurement model. Overall, the research provides valuable insights into the dynamics of AI-driven digital innovation, supporting strategic integration of AI technologies to drive sustainable innovation and gain a competitive edge in the digital era.This study investigates the influence of Artificial Intelligence (AI) on digital innovation using a SmartPLS approach, analyzing data from 156 observations. AI has become a powerful driver of innovation, reshaping organizational processes and outcomes across various sectors. The research explores the relationships between AI adoption and digital innovation outcomes, focusing on process efficiency, product quality, and service creativity. Findings reveal significant correlations, highlighting AI's role in enhancing organizational readiness, technological integration, and data quality. The study emphasizes the importance of fostering an innovation culture and implementing effective change management strategies to fully leverage AI-driven digital transformation. The SmartPLS model is validated through high R-Square and path coefficient values, confirming the validity of the research hypotheses. The study contributes to a deeper understanding of AI's mechanisms in influencing digital innovation, offering actionable insights for businesses, policymakers, and researchers. Key findings include the significant influence of organizational readiness on technological integration, which in turn affects data quality and accessibility. Innovation culture is found to positively influence change management strategies, facilitating successful AI adoption. The study also highlights the robustness of the SmartPLS model in explaining the variance in intermediary variables, confirming the reliability and validity of the measurement model. Overall, the research provides valuable insights into the dynamics of AI-driven digital innovation, supporting strategic integration of AI technologies to drive sustainable innovation and gain a competitive edge in the digital era.