Abstract Artificial Intelligence (AI) is revolutionizing the manufacturing sector by enabling smarter, more adaptive production systems. This research paper investigates the transformative influence of AI on modern manufacturing, focusing on applications such as predictive maintenance, quality control, supply chain optimization, and human-robot collaboration. A mixed-methods research design was adopted, integrating qualitative interviews and case studies with quantitative data analysis. Results indicate that AI technologies significantly reduce downtime and defects while enhancing efficiency and sustainability. However, challenges such as high implementation costs, ethical concerns, and skill gaps remain. The paper concludes with strategic recommendations for manufacturers, policymakers, and researchers aiming to leverage AI for competitive and sustainable growth in Industry 4.0. Keywords: Artificial Intelligence, Industry 4.0, Predictive Maintenance, Smart Manufacturing, Ethical AI, Robotics.