Artificial Intelligence (AI) is one of the fastest-growing and most ubiquitous technologies to date. This rapid advancement has left higher education institutions pondering if and how they should utilise AI in learning and assessment, especially given concerns with issues of academic integrity. Moreover, current theoretical understandings informing effective and ethical use of AI in education are underdeveloped and somewhat elusive. In this chapter, we present a conceptual model that theorises how humans and AI might engage in co-constructing learning and assessment outputs. The model considers the interaction between the types and levels of ‘thinking’ occurring between humans and AI, the human competencies and values-focused elements essential to ethical AI use, and the Reckoning capabilities of AI. It also proposes that greater emphasis in curriculum be given to developing students’ ethical frameworks and affective attributes, that will guide them in making appropriate and productive use of AI in learning and assessment. Aligned with this, arguments are presented that education should adopt a progressive rather than regressive response to AI, seizing the opportunity it presents to reconceptualise learning and assessment towards designs that promote valued future capabilities, such as higher order and creative and critical thinking. We hope the model adds to theoretical perspectives on how AI might meet its educational potential, and be useful for educators considering how AI might augment authentic learning and assessment.