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AI literacy encompasses the knowledge and skills needed to effectively develop, manage, and understand AI's potential in various fields, including education. However, existing research indicates a significant gap in studies focused on AI literacy, particularly regarding its determinants and impacts. This study explores AI literacy among undergraduate students at Malaysian local universities, focusing on those in the Faculty of Information Science Studies at six branches of Universiti Teknologi MARA (UiTM). A quantitative research approach was used to collect data from these students. A total of 301 responses were analyzed using Partial Least Squares Structural Equation Modelling (PLS-SEM) and SPSS. The results show a significant positive relationship between cognitive absorption, digital divide, effort expectancy, awareness of AI, and AI literacy. Nonetheless, unlike previous studies, this research found no significant link between attitudes toward AI and performance expectations or AI literacy. Additionally, AI literacy affects student productivity. This study provides valuable insights for scholars, who can use the theoretical framework to deepen their understanding of AI literacy. Educational institutions and policymakers can apply these findings to develop new courses, programs, and strategies centered on AI literacy.

Keywords: Artificial Intelligence (AI), AI Literacy, AI Education, Student Productivity, AI Impacts