Artificial Intelligence (AI) optimizes inventory management by analyzing data patterns, predicting demand, and automating restocking processes. AI algorithms can assess historical sales data, seasonal trends, and consumer behavior to forecast future inventory needs accurately. This reduces overstock and stockouts, lowering carrying costs and enhancing customer satisfaction. Additionally, AI can optimize warehouse operations through predictive analytics, enabling efficient space utilization and order fulfillment processes. By incorporating AI technology, businesses can streamline their inventory management, improving overall efficiency and responsiveness in a competitive marketplace.