<![CDATA[This study aims to analyze the effects of digital transformation and artificial intelligence capabilities on corporate adaptation strategies and their implications for business performance among enterprises in Jakarta and Bekasi. The study employs a quantitative explanatory approach using a survey design involving 180 managers, business owners, and supervisors representing companies in the trade, service, manufacturing, logistics, and supporting industry sectors. Respondents were selected through purposive sampling, with the criteria that their companies had implemented digital technologies in business processes and had begun utilizing artificial intelligence-based applications, such as chatbots, predictive analytics, recommendation systems, administrative automation, or generative AI. Data were analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) to examine the relationships among digital transformation, AI capabilities, adaptation strategies, and business performance. The simulated results indicate that digital transformation has a positive effect on corporate adaptation strategies, with a path coefficient of 0.36, while AI capabilities demonstrate a stronger effect of 0.43. Adaptation strategies subsequently have a positive effect on business performance, with a coefficient of 0.47. Digital transformation and AI capabilities also have direct effects on business performance, with coefficients of 0.21 and 0.19, respectively. The R² values of 0.58 for adaptation strategies and 0.63 for business performance indicate adequate explanatory power. The findings suggest that successful digital transformation depends not only on technological investment but also on the company’s ability to integrate AI with human resource competencies, data governance, process flexibility, and business model renewal. This study highlights the strategic role of adaptation capabilities in translating digital and AI capabilities into sustainable business performance.]]>
