<p>Artificial Intelligence (AI) is transforming the global Information Technology (IT) sector through automation, data-driven decision-making, and innovation acceleration. In India, the IT sector has emerged as a critical driver of economic growth, and regional ecosystems such as Rajasthan are increasingly participating in this transformation. This paper analyses the impact of AI on the IT sector in Rajasthan by examining employment trends, skill transformation, industrial growth, governance initiatives, and structural challenges. The study finds that AI acts both as a disruptive and enabling force&mdash;reshaping job roles, increasing productivity, and fostering new technological ecosystems&mdash;while also creating challenges related to skill gaps, infrastructure, and regional disparities.</p>