Artificial intelligence (AI) is transforming identity management, enhancing security, authentication, and fraud prevention for businesses. AI-driven systems streamline user verification, improve compliance, and reduce human errors. However, these advancements come with risks, including biased algorithms, data privacy concerns, and cybersecurity threats. While AI strengthens identity protection, businesses must address ethical and security challenges to prevent misuse. Understanding both the benefits and risks of AI in identity management is crucial for organizations aiming to balance efficiency and security in a rapidly evolving digital world.