Introduction: The rapid advancement of Artificial Intelligence (AI) and digital transformation has significantly reshaped the Islamic banking industry, requiring financial institutions to strengthen technological capabilities while maintaining sustainable performance. This study aims to examine the effects of Artificial Intelligence Readiness and Digital Infrastructure on the Profitability of Islamic Commercial Banks in Indonesia, with Sustainability Performance serving as a mediating variable. Methods: This study employs a quantitative explanatory research design using secondary panel data collected from the Annual Reports, Sustainability Reports, and audited financial statements of Islamic Commercial Banks in Indonesia during the 2020–2025 period. Artificial Intelligence Readiness, Digital Infrastructure, and Sustainability Performance are measured using disclosure indices developed through content analysis, while Profitability is measured using Return on Assets (ROA). The data are analyzed using panel regression and mediation analysis. Results: The findings indicate that Artificial Intelligence Readiness and Digital Infrastructure positively influence Sustainability Performance. Furthermore, Artificial Intelligence Readiness, Digital Infrastructure, and Sustainability Performance have positive and significant effects on profitability, indicating that sustainability performance partially mediates the relationship between digital capabilities and financial performance. These findings demonstrate that technological readiness and digital infrastructure contribute to improving operational efficiency, governance quality, and the long-term financial performance of Islamic Commercial Banks. Conclusion and Suggestion: The study concludes that integrating AI readiness with robust digital infrastructure supports sustainable profitability through improved sustainability performance. Islamic Commercial Banks are therefore encouraged to strengthen investments in AI technologies, digital infrastructure, and sustainability initiatives as integrated strategic priorities. Future research is recommended to expand the observation period, include cross-country Islamic banking data, and incorporate additional variables such as digital innovation capability, cybersecurity readiness, and corporate governance to provide a broader understanding of sustainable digital transformation in the Islamic banking sector.
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