The increasing prominence of Artificial Intelligence (AI) is undoubtedly transforming the education landscape, offering new pedagogical advantages alongside notable ethical challenges. This study aims to examine the impact of Artificial Intelligence (AI) on higher education by investigating both its pedagogical benefits and ethical challenges. The main variables encompass the deployment of AI tools (predictive analytics, automated grading systems, intelligent tutoring systems) and their effects on educational practices, such as personalized learning, administrative automation, and adaptive assessment. The dependent variables are educational outcomes, accessibility, engagement, efficiency, and ethical concerns like privacy and data protection. In the context of higher education, this research delves into the challenge of reconciling AI’s potential to transform learning with the imperative to address profound ethical concerns. This focus is crucial given the growing integration of AI in academic settings, which poses risks to privacy and ethical standards. Utilizing a systematic review methodology, the study synthesizes current literature and historical trends to offer a nuanced understanding of AI’s dual impact. The findings enrich ongoing discussions by highlighting the promise of AI in enhancing educational outcomes while emphasizing the importance of ethical considerations for its responsible implementation. Ultimately, this investigative research concludes that while AI holds promise for improving educational outcomes, its implementation demands meticulous attention to ethical principles.