The rapid advancement of Artificial Intelligence (AI) is reshaping new venture creation and driving business innovation across various industries. This research paper explores the impact of AI on startups and established businesses, focusing on how AI technologies facilitate the development of new business models, enhance operational efficiency, and foster innovation. The study employs AI’s contribution to Automation and decision making its impact on risk, opportunity and sustainability & framework and policies to support AI driven innovation. Key findings reveal that AI significantly lowers entry barriers for new ventures by automating processes, improving decision-making, and enabling scalable solutions. Moreover, AI contributes to business innovation by generating novel products and services, optimizing customer targeting, and enhancing competitive advantage. However, the research also identifies challenges such as ethical considerations, data privacy issues, and the need for technical expertise. The paper concludes that while AI presents substantial opportunities for innovation and growth, it also requires careful management and strategic implementation to fully realize its potential. Recommendations include adopting best practices for AI integration and developing supportive policies to nurture AI-driven entrepreneurial ecosystems.