AI technologies offer significant potential for firms to improve business performance, whilst at the same time managers have struggled to understand the issues around integrating AI technologies into their business. This chapter provides an understanding of the business, technical and ethics issues involved in implementing AI in the context of digital transformation. An overview of AI is provided including AI types and technologies based on intelligence, technology and function. Machine learning and the role of fixed and adaptive algorithms are outlined. It is shown how the key AI capabilities of autonomy and learning can transform business performance. The risks of applying AI are highlighted including algorithmic transparency, algorithmic bias, and changing operating environment. A framework is presented which outlines the key practices required for effectively managing business, technical and ethics issues involved in implementing AI in digital transformation.