In the present competitive business environment, technological advancement has become an essential factor for organizational survival and growth. Artificial Intelligence (AI) is one of the emerging technologies that enables organizations to improve operational efficiency, decisionmakingability, productivity, customer satisfaction, and long-term sustainability. Small and Medium Enterprises (SMEs) play a significant role in economic development, employmentgeneration, innovation, and industrial growth. However, SMEs often face various challenges in adopting advanced technologies due to financial constraints, lack of skilled manpower, and technological uncertainty. This study attempts to analyze the adoption of Artificial Intelligence and its impact on business sustainability among SMEs in Coimbatore District.The study examines the level of AI adoption, the benefits derived from AI implementation, the challenges faced during adoption, and the influence of AI on business sustainability. Primary data were collected from 120 respondents from various SMEs operating in textile, engineering, manufacturing, and information technology sectors in Coimbatore District through a structured questionnaire. Statistical tools such as Percentage Analysis, Chisquare Test, Weighted Average Method, Correlation Analysis, and Regression Analysis were used for analyzing the data. The findings of the study reveal that AI adoption significantly contributes to operational efficiency, cost reduction, innovation capability, and sustainable business growth among SMEs.