Asian Journal of Education and Social Studies

This study examines the role of Artificial Intelligence (AI) in enhancing the competitive advantage of Small and Medium Enterprises (SMEs) within Taraba State’s evolving business environment. Specifically, it assesses the extent of AI adoption, evaluates its impact on competitiveness and operational efficiency, and identifies the main obstacles preventing its widespread use. A survey design that combined qualitative (semi-structured interviews) and quantitative (structured questionnaires) methodologies was used. A stratified random sample of 250 SMEs was drawn from a population of 6,800 registered enterprises across major sectors in Taraba State. Data were analyzed using descriptive statistics and mean scores, with analysis conducted using the Statistical Package for Social Sciences (SPSS). The results indicate that although awareness of AI is moderate and overall adoption remains limited, SMEs that deploy AI-driven Business Intelligence (BI) tools experience improvements in operational efficiency, decision-making quality, and market positioning. However, major obstacles particularly the acute shortage of skilled professionals (Mean = 3.23), alongside high implementation costs and weak digital infrastructure continue to impede broader adoption. The study concludes that AI’s transformative potential among SMEs in Taraba State is significantly constrained by structural readiness gaps, necessitating immediate and coordinated policy intervention. It recommends targeted capacity-building initiatives, financial support mechanisms, public sensitization programs, and sustained investment in digital infrastructure to enable inclusive and sustainable AI integration within the SME sector.