This paper discusses how Artificial Intelligence (AI) significantly transformed software engineering practices, automating tedious tasks, improving accuracy and improving software life cycle efficiency. AI techniques such as machine learning, deep learning, natural language processing and diffuse logic have been successfully applied at various phases, such as requirements engineering, design, development and particularly tests. Despite promising advances, challenges such as interpretability, ethical concerns, and practical implementation issues persist, requiring continuous research for sustainable integration. This article explores significant impacts, challenges, key technologies and future AI integration possibilities on software engineering.