his study evaluates the impact of artificial intelligence (AI) on education and explores the potential threats it poses in the 21st-century knowledge economy. Employing Sociocultural Theory, Humanistic Theory, and Technological Determinism, the research delves into the complexities of AI integration in educational contexts. Utilizing a qualitative research methodology, the study highlights the significant shift towards an information-driven economy where AI enhances efficiency by automating routine tasks and providing rapid access to information. AI-powered technologies, such as chatbots and virtual assistants, offer personalized learning experiences and instant feedback, thereby enriching the educational process. However, these advancements come with challenges. A primary concern is the potential displacement of educators, as sophisticated AI systems may threaten their jobs. Additionally, AI can perpetuate existing biases inherent in the data it is trained on, potentially reinforcing social and cultural stereotypes and limiting students’ exposure to diverse perspectives. Addressing these issues requires proactive efforts from educators and developers to create unbiased AI systems and ensure the promotion of a wide range of ideas and viewpoints. While AI presents substantial opportunities for enhancing education, it also poses risks to traditional teaching methods, critical thinking skills, and job security for educators. Embracing AI as a complementary tool rather than a replacement for human interaction and guidance is crucial. By fostering unbiased AI systems and promoting critical thinking, education can successfully adapt and flourish in the 21st-century knowledge economy. Keywords AI, Education, Knowledge Economy, Sociocultural Theory,