The unprecedented growth of digital technologies in the contemporary era has fundamentally reshaped the way businesses interact with consumers, with Artificial Intelligence (AI) emerging as a central driver of this transformation. AI has revolutionized digital marketing by enabling highly personalized, efficient, and data-driven strategies that enhance customer engagement and optimize business performance. Technologies such as machine learning, predictive analytics, big data processing, and natural language processing have empowered organizations to analyze vast volumes of consumer data, predict behavioral patterns, and deliver tailored marketing content in real time.

However, the increasing dependence on data-intensive AI systems has given rise to significant concerns regarding data privacy, security, and ethical usage. The large-scale collection, storage, and processing of personal data have exposed individuals to risks such as unauthorized access, data breaches, profiling, and surveillance. These concerns are further aggravated by the lack of transparency in AI algorithms and the limited awareness among users regarding how their data is being utilized.

This research paper seeks to critically examine the intersection of AI and digital marketing, with a specific focus on the implications for data privacy. It analyzes the role of legal frameworks in regulating data-driven marketing practices, including key legislations such as the Digital Personal Data Protection Act, 2023 (India), the Information Technology Act, 2000, and the General Data Protection Regulation (GDPR) of the European Union. The study also explores major challenges such as excessive data collection, weak enforcement mechanisms, lack of user consent, and ethical issues like algorithmic bias and manipulation.