This chapter examines the synergistic relationship between cloud computing and artificial intelligence (AI) as the core driver of modern digital transformation. It argues that while cloud computing provides the foundational infrastructure for organizational agility—enabling scalability, speed, and DevOps practices—it is the strategic application of AI that acts as the essential catalyst. AI transforms cloud capabilities into intelligent operations through predictive analytics, automation, and generative capabilities. The analysis moves from theoretical foundations to practical use cases across business functions, outlining the necessary human and organizational shifts. Crucially, the chapter concludes with a comprehensive discussion of the multi- faceted implications, addressing the managerial, practical, ethical, and social considerations leaders must navigate to harness this transformative potential responsibly and effectively.