The development of artificial intelligence has transformed the way digital storytelling is produced and consumed, but it has also raised ethical and social challenges related to privacy, algorithmic bias, and creative autonomy. This study aims to examine the role of artificial intelligence (AI) in reshaping modern digital narratives with a focus on how this technology affects the production, distribution, and consumption of digital content. This study uses a systematic literature review method to identify and analyze 92 studies published in indexed journals related to AI and media. Data were collected with relevant criteria in the last 5 years. Data analysis was carried out using a thematic approach. The results show that AI plays a significant role in personalizing user experiences, increasing interactivity, but this study also identifies ethical and social challenges that arise from the use of AI in media, such as data privacy issues, algorithmic bias, and the potential loss of creative autonomy for content creators. In addition, this study found a gap in the literature discussing the long-term impacts of AI on cultural production, human creativity, and audience agency. The results of this study suggest that, while AI offers significant opportunities for innovation, attention to ethical and social aspects remains crucial to ensure that future digital storytelling balances technological innovation and social responsibility.