<p>Despite the growing criticality of digital transformation, family businesses (FBs) are cautious to adopt artificial intelligence (AI) in talent management due to the concerns over maintaining family control, legacy, socio-emotional wealth (SEW). This literature review investigates how family businesses are navigating AI Adoption in talent management, its implication for the competitiveness. Based on forty-nine scholarly resources, the findings indicate that AI adoption is positively influenced by entrepreneurial orientation, innovation, openness of the top managers to reshape SEW whereas the skepticism is rooted in intergeneration conflict, technological inertia, SEW protection. AI in talent management promotes data-driven decision making, transparency, fairness in which leads to adaptability, higher competitiveness. Unlike the non-family counterparts, the FBs align AI initiatives with their legacy instead of focusing on the economic, and efficiency-based outcomes only. AI adoption in talent management should be done in multiple phases starting from making the top leaders aware about the long-term benefits, communicating the value to all levels across the organisation, realigning the family values with technological advancements. This review contributes to the literature by providing insight on the intersection of AI-adoption in talent management, family dynamics, competitiveness. Future research agenda to explore underexamined linkages between AI, FB talent management, competitiveness are outlined.</p>