It is a conceptual study conducted on the effects of the adoption of digital innovation and artificial intelligence (AI) to the performance of an entrepreneur particularly the small and medium enterprises (SMEs). This paper discusses the multidimensionality of digital innovation and implementation of AI, namely, technological, organizational, and environmental, which affects the performance of entrepreneurs (that is, up to business growth, operation efficiency, product and process innovation, and market competitiveness). Basing on the Resource-Based View (RBV), Technology-Organization-Environment (TOE) and Innovation Diffusion Theory (IDT), the research paper is able to form a cohesive conceptual framework of the relationships between digital innovation, AI adoption and entrepreneurial orientation to the performance outcomes. The study brings empirical studies conducted on global, regional and Nigerian levels to the fore bringing out mediating effect of entrepreneurial orientation and moderating effect of organizational resources and environmental enablers. The most significant results show that digital innovation and AI adoption have a positive impact on operational efficiency, business development, and business competitive advantage, whereas the lack of digital literacy, resource limitations, and regulatory obstacles may become a hindrance to adoption. The research proposes strategic management intervention, polyfaceted policy frameworks and future research opportunities to maximize AI-based entrepreneurship.