Artificial Intelligence (AI) has become a transformative tool in digital marketing, enabling businesses to deliver highly personalized content, advertisements, and product recommendations based on consumer preferences and behavior. This study focuses on understanding consumer awareness and perception toward AI-powered personalization and its impact on buying behavior. The research was conducted among 100 online consumers in Palakkad District using a descriptive research design. Data were collected through a structured questionnaire and analyzed using percentage analysis, weighted average ranking, and the Chi-square test. The findings reveal that most respondents are aware of AI applications in marketing and frequently encounter personalized recommendations online. Education and income were found to significantly influence perceptions toward AI personalization, while gender, age, and occupation showed no significant effect. The study suggests that marketers should use AI ethically by ensuring transparency, protecting user data, and maintaining a balance between personalization and privacy.