Due to the quick advancement of digital technology, artificial intelligence (AI) has emerged as a crucial instrument in changing how companies engage with customers. The effect of AI-driven personalization on consumer perception in digital marketing is the main objective of this study. Data from 100 respondents in Palakkad was gathered using a structured questionnaire as part of the study. Statistical methods such percentage analysis, chi-square test, scaling technique, and Garratt ranking test were used for data analysis. Findings suggest that AI personalization boosts customer interaction and loyalty. The study concludes that for marketers to improve AI-based approaches for stronger customer connections and company expansion, the research offers insights..