AI is becoming one of the most influential factors affecting evolutionary knowledge management in today’s educational structures, and it has advantages and challenges. In this paper, the author reviews the state of AI in the literature with regard to its applications on education in terms of improving teaching and learning experiences, administration, and the provision of customized learning environment for every student. The review presents the benefits of self-paced personalized learning with the help of AI, intelligent tutoring system, and data analytic-based decision–making; however, it also points out some major challenges: namely, privacy issues; issues in obtaining access to technology materials and resources; ethical issues; and challenges faced by educators and learners. Using examples from various cases and applications, the paper shows how AI can be used effectively, and what possible challenges may arise when employed in educational organizations. It also explores the future direction of learning with AI, identifying current and potential technologies and new learning paradigms. The findings intend to provide a set of recommendations for educators, policymakers, and institutions depending on and implementing AI safely and effectively.