<![CDATA[The rapid advancement of Artificial Intelligence (AI) has accelerated digitaltransformation across various sectors, including Micro, Small, and MediumEnterprises (MSMEs). Nevertheless, AI adoption among MSMEs remainsinfluenced by several factors, particularly digital literacy and human resourcereadiness. This study aims to examine the effects of digital literacy and humanresource readiness on AI adoption among MSMEs in Medan City, Indonesia. Aquantitative approach with an explanatory research design was employed. Thestudy involved 80 MSMEs owners selected through purposive sampling. Datawere collected using a structured questionnaire and analyzed using multiplelinear regression with IBM SPSS Statistics 30. The results show that digitalliteracy has a positive and statistically significant effect on AI adoption (β =0.202; p = 0.042), while human resource readiness has a stronger positive andstatistically significant effect (β = 0.638; p < 0.001). Simultaneously, bothvariables significantly affect AI adoption (F = 65.140; p < 0.001), with an R² of0.629, indicating that 62.9% of the variance in AI adoption is explained by themodel. These findings highlight the importance of strengthening digital literacyand human resource readiness to support AI adoption among MSMEs. The studycontributes empirical evidence for policymakers and MSMEs supportinstitutions in developing targeted capacity-building programs to acceleratesustainable digital transformation.]]>
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