The use of Artificial Intelligence (AI) in e-commerce opens up new horizons for innovation and efficiency, but also brings significant challenges. This paper aims to analyze the impact of AI in e-commerce, with focus on personalizing customer experiences, optimizing business processes, and data-driven decision-making. Simultaneously, ethical, security, and regulatory challenges posed by the widespread adoption of AI are discussed. This article only examines how AI may be used to optimize company operations and personalize customer experiences, but it also looks into how AI is changing e-commerce marketing methods. The way e-commerce companies handle market segmentation and targeted advertising is significantly changing as a result of AI's capacity to examine customer behavior and forecast future trends.