This book chapter adopts a multidimensional approach to examine the impact of artificial intelligence (AI) technologies on innovation processes in Turkey. It emphasizes that AI not only drives technical advancement but also reshapes socio-economic structures. The conceptual framework explores the historical development of AI and its interaction with innovation, explaining the roles of components such as machine learning, natural language processing, and deep learning. In the Turkish context, case studies from sectors like healthcare, finance, manufacturing, and small and medium-sized enterprises’s (SME) illustrate AI’s practical implications. Furthermore, the innovation ecosystem involving government strategies, private sector initiatives, and university collaborations is evaluated. Ethical concerns including digital inequality, algorithmic bias, and labor transformation are discussed in detail. Finally, strategic projections regarding the future of AI-driven innovation are presented, emphasizing the necessity of multi-stakeholder, ethically grounded, and human-centered strategies to ensure that this transformation is both sustainable and inclusive.