Transformational Leadership and Ethical AI Adoption in AI-Driven Organizations: The Mediating Role of Digital Adaptation and the Moderating Role of Organizational Culture

Artificial intelligence is now embedded in how US organizations operate and compete, yet turning that promise into ethical practice is far from automatic. This study examines how transformational leadership shapes ethical AI adoption, with digital adaptation as the channel through which leadership operates and organizational culture as a condition that either strengthens or weakens that channel. The study tests a moderated-mediation model using survey data from 318 managers and employees in US AI-driven organizations spanning technology, finance, telecommunications, healthcare, manufacturing, and consulting. The findings revealed that transformational leadership was positively associated with digital adaptation, which, in turn, was associated with higher ethical AI adoption. Digital adaptation partially mediated the association between transformational leadership and ethical AI adoption. Organizational culture significantly moderated the digital adaptation–ethical AI adoption path, with the association more pronounced in adaptive, innovation-oriented cultures. The model explained 64% of the variance in ethical AI adoption; as a secondary, downstream outcome, ethical AI adoption was in turn associated with organizational performance (58% of variance explained). Leaders should build transformational leadership capacity, strengthen digital capability, govern AI ethically, and nurture enabling cultures. The study specifies digital adaptation as the mechanism and ethical AI adoption as the outcome through which transformational leadership operates in AI-driven organizations. It identifies organizational culture as a boundary condition that shapes that mechanism, thereby integrating transformational leadership theory, the dynamic capabilities perspective, and the resource-based view.