This study analyzed the impact of the technological, organizational and environmental variables PU, PEOU, TMS, OR and RS contributing to the adoption of AI in digital marketing. The quantitative research design was used and primary data was gathered using a structured questionnaire of 212 managers and marketing practitioners. The sampling was based on convenience, and the answers were examined in the form of SEM with the help of SmartPLS. It has been found that the most important predictors of AI adoption were OR and TMS, next in importance were technological factors, PU and PEOU, and environmental support with the help of RS. The model attributed 84 percent of the variance in the AI adoption, meaning it was an excellent predictor. These findings underscore the importance of internal and external assistance in the successful integration of AI in digital marketing practices by SMEs. In practice the study offers practical implications to managers to improve OR and regulatory environments that are favorable to policies by policymakers. Socially, it highlights the possibility of AI implementation in enhancing the competitiveness of SMEs and customer interaction in new economies. The paper is innovative in its application of the TOE model to AI adoption in digital marketing by Bangladeshi SMEs and in integrating the technological, organizational, and environmental models. Limitations are that it is in the form of a cross-sectional design and that the convenience sampling method was used, which could have an impact on its generalizability. Further studies can incorporate longitudinal studies and consider other moderating variables.