Over the past decade, advanced technologies like artificial intelligence (AI) have significantly influenced the evolution of business processes and organizational structures. The growing adoption of these innovations has improved effectiveness, efficiency, and overall performance by combining existing knowledge with new advancements, thereby enhancing AI's capabilities. The present research adopted a descriptive quantitative methodology with a causal approach to investigate AI's effect on employee performance, with an emphasis on the mediating roles of knowledge sharing and employee engagement. The study targeted employees from four state-owned banks in Indonesia—BNI, BRI, BTN, and Mandiri—and gathered data from 200 respondents using a purposive sampling technique. Structural Equation Modeling (SEM) was conducted with AMOS 24 software. The findings demonstrated that AI had a positive and significant effect on employee performance, knowledge sharing, and employee engagement. Furthermore, both knowledge sharing and employee engagement significantly and positively affected employee performance. These results underscored the significance of knowledge sharing and employee engagement as key mediators in the correlation between AI and employee performance.
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