Small and Medium Enterprises (SMEs) are adopting emerging technologies like Artificial intelligence (AI), cloud computing, and blockchain. The research has shown that SMEs also face significant challenges at various stages of AI adoption, from conception to post-implementation, resulting in either no or partial implementation. Therefore, it is critical to examine the factors that influence the use of AI by SMEs. Through this research, we are answering the following research questions: How is AI perceived by the SMEs in their business operations? What are the key factors that influence the use of AI in SMEs? This research is based on a case of insurance SMEs in Oman, using a qualitative approach, and conducted 14 semi-structured interviews. Six key themes were found, which reflect on the current processes and barriers to integrating AI. This study argues that the sustained use of AI requires not just technology but also alignment with micro-level processes and support from technology partners, funding, workforce development, and policy support to enable SMEs to use AI applications in the long term. Overall, the study underscores the critical factors that impact the use of AI by SMEs. This research has both theoretical and practical implications.