TRANSFORMATION OF HUMAN CAPITAL UNDER THE DIFFUSION OF ARTIFICIAL INTELLIGENCE: IMPLICATIONS FOR KNOWLEDGE MANAGEMENT AND INNOVATION MANAGEMENT

<jats:p>The rapid diffusion of artificial intelligence technologies is reshaping the foundations of organizational development, creating new challenges for knowledge management and innovation management. The relevance of the study is determined by the growing need to rethink the role of human capital in an environment where intelligent algorithms increasingly participate in information processing, decision support, and innovation activities. The purpose of the research is to identify the key directions of human capital transformation under the diffusion of artificial intelligence and to determine their implications for knowledge management systems and innovation management practices in contemporary organizations. The methodological framework of the study is based on an interdisciplinary approach that combines the concepts of human capital theory, knowledge-based management, innovation management, and digital transformation. The research applies methods of theoretical generalization, comparative analysis, synthesis, abstraction, and systems thinking to reveal the relationships between human competencies, organizational knowledge resources, and artificial intelligence technologies. The use of a conceptual modeling approach made it possible to identify the mechanisms through which digital technologies influence the creation, dissemination, and practical application of knowledge within organizations. The findings demonstrate that the diffusion of artificial intelligence contributes to the emergence of new forms of interaction between employees and intelligent systems, transforming traditional approaches to knowledge creation and innovation processes. Human capital is increasingly characterized not only by the possession of professional expertise but also by the ability to integrate digital capabilities into decision-making and problem-solving activities. The study reveals that organizational competitiveness is becoming strongly dependent on the effective combination of human creativity, critical thinking, learning capacity, and algorithmic support. It is substantiated that knowledge management evolves from a process focused primarily on information accumulation toward a dynamic system that facilitates continuous learning, knowledge integration, and collaborative value creation. Simultaneously, innovation management is shifting toward more flexible and adaptive models that encourage experimentation, rapid knowledge exchange, and the development of innovation ecosystems supported by digital technologies. The practical value of the article lies in the development of conceptual guidelines for organizations seeking to strengthen their innovative potential and enhance the effectiveness of knowledge management in the era of artificial intelligence. The obtained results may be used for designing managerial strategies aimed at developing human capital, improving organizational learning processes, promoting knowledge sharing, and creating conditions for sustainable innovation-driven growth in the digital economy.</jats:p>