Artificial Intelligence Literacy and Its Impact on Learning Outcomes and Academic Performance of Generation Z Students: Evidence from the Mumbai Metropolitan Region

Artificial intelligence (AI) has emerged as a transformative force in education, enabling personalized learning, skill development, and academic enhancement while supporting Sustainable Development Goal 4 (Quality Education). Despite the growing adoption of AI-driven tools in educational settings, existing research has predominantly focused on technical implementation and pedagogical design, with limited attention to students’ behavioral engagement with AI. This study addresses this gap by examining the relationships among AI literacy, AI usage, AI-enabled learning outcomes, and academic performance among Generation Z students in the Mumbai Metropolitan Region (MMR), India. A quantitative research design was adopted, with data collected from Generation Z students enrolled in higher education institutions across Mumbai City, suburban Mumbai, Navi Mumbai, and Thane. Structural Equation Modelling (SEM) was employed to test the proposed conceptual framework and to analyze both direct and indirect relationships among the study variables. The findings reveal that AI literacy has a significant positive influence on AI usage, AI usage positively affects learning outcomes, and AI-enabled learning outcomes significantly enhance academic performance, indicating meaningful mediating effects. The study contributes empirical evidence from a major metropolitan educational ecosystem and presents a validated behavioral model of AI adoption in education. The results highlight the importance of integrating AI literacy into curricula, strengthening faculty capacity, and ensuring equitable access to AI technologies to improve student learning and academic performance.