The integration of Design Thinking into the research stream of Human-Centered AI (HCAI) facilitates AI systems to align with human needs, ethical standards, and organizational goals in order to augment human capabilities. By applying the five phases Empathize, Define, Ideate, Prototype, and Test—AI development becomes more user-focused, iterative, and impactful. This structured approach enables AI solutions to be technically robust while remaining adaptable to evolving regulatory, social, and business environments. A novel framework is introduced, where the AI lifecycle interacts with the Design Thinking process to drive ethical, transparent, and strategic AI adoption. This framework emphasizes the importance of data governance, transparency, explainability, and bias mitigation, ensuring AI systems are fair and trustworthy. At the same time, it aligns AI development with business objectives, workforce capabilities, and operational needs, fostering collaboration and responsible innovation. The framework is illustrated through a series of case studies that demonstrate how Design Thinking can facilitate human-centered AI development across different application domains.