Developing AI Literacy as a Core Competency for Future Leaders

In the rapidly evolving digital landscape, Artificial Intelligence (AI) is reshaping how decisions are made, problems are solved, and strategies are executed across sectors. As such, developing AI literacy has become a critical core competency for future leaders. This paper explores the concept of AI literacy beyond technical understanding, emphasizing the strategic, ethical, and human-centric dimensions leaders must grasp to thrive in AI-integrated environments. It argues that AI-literate leadership entails the ability to interpret, evaluate, and responsibly integrate AI tools in ways that enhance decision-making, foster innovation, and promote inclusive growth. Drawing from interdisciplinary literature, real-world case studies, and emerging frameworks, the study proposes a holistic model for embedding AI literacy into leadership development programs. The findings underscore the urgency of equipping leaders not only with digital fluency but with a critical mindset capable of navigating the opportunities and challenges posed by AI. Ultimately, cultivating AI literacy is not optional — it is essential for leaders aiming to remain relevant, responsible, and resilient in the Fourth Industrial Revolution.