The emergence of AI-driven organizational change has become a revolutionary change that allows firms to redesign their strategic models, structural designs, and decision-making system to attain sustainable competitive advantage in the ever-changing business landscape. With the development of the artificial intelligence platforms, including machine learning, predictive analytics, natural language processing and intelligent automation, companies are embracing the capabilities to develop strategic agility, provide more efficient processes, augment innovation pipelines, and remodel value creation mechanisms. The AI-enabled transformation models assist firms in mating the old top-down hierarchy models with data-based adaptive and learning ecosystems that can respond swiftly to the evolving markets. These frameworks also help to promote on-going enhancement, evidence-based decision-making, cross-functional teamwork, and allow companies to match the strategic goals with environmental, social, and governance (ESG) requirements. Through the integration of AI in the strategic planning, resource allocation, human resource development, and customer interface, organizations will be able to drive faster to be digitally mature and develop resilient systems that ensure sustained competitiveness. Nonetheless, AI-based transformation also presents threats of complexity, skills and expertise, ethical issues and aversion to change. In this paper, the strategic transformation models that are driven by AI are discussed, the contribution made to the organizational evolution is examined, the contribution made to sustainable competitive advantage is evaluated, and a conceptual framework where AI capability, strategic flexibility and sustainability-based value creation are integrated is provided.