<p>Despite the considerable increase in AI-Entrepreneurship research, it often neglects the impact of AI on individuals’ motivations. This paper seeks to address this gap by examining the relationship between AI literacy and e-entrepreneurial intention among business students in Jordan. The conceptual model was grounded on two theories simultaneously. For the data analysis, Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze 349 survey responses. The findings highlight that AI literacy does not appear to have a direct impact on e-entrepreneurial intention, but shows an indirect effect via a serial mediation process where AI literacy first boosts e-entrepreneurial self-efficacy, which then stimulates an innovation mindset, ultimately activating students’ intention to start an online business. These results suggest that teaching AI skills alone is not enough, stimulating innovation state is a necessary psychological intervention. Lastly, we introduce an integrative approach that considers the cognitive changes required to convert AI Literacy into actual entrepreneurial activity, offering valuable insights for educators and policymakers.</p>