International University Travnik in Travnik Nauka i tehnologija nit-2025;13(1) Page 64 of 75 UNDERSTANDING THE VERSATILE IMPACTS OF AI ON COMPETENCY DEVELOPMENT Kagan Cavusoglu 1 1 Varna Free University “Chernorizets Hrabar”, Faculty of Social, Business and Computer Sciences, Department of Psychology e-mail: kagancavusoglu@gmail.com Review article https://doi.org/10.58952/nit20251301064 UDC 004.8:37.018 Summary Artificial Intelligence (AI) has caused significant changes and important developments have been made in accessibility by customising learning. This paper discusses AI’s facilitating and destructive roles in developing competencies. While AI-supported tools promote personalised learning, real-time feedback and interdisciplinary cooperation, they also bring challenges like decreasing intrinsic motivation, dissolving the natural learning process by causing overreliance and sabotaging competency development. This study emphasises the importance of the usage of AI as more of a supportive tool while using it in developing human competencies. For this reason, supporting holistic approaches that combine the efficiency provided by AI and human skills, promoting autonomy and engagement, and a lifelong learning culture is suggested. It is emphasised that individuals can demonstrate a more dynamic and balanced competency development while preparing for future needs, by taking these suggestions into consideration and utilizing the AI’s potential at the highest level. Keywords: artificial intelligence, competency, learning, development, intrinsic motivation. JEL classification: O33, J24, L86, D83 This work is licensed under a Creative Commons Attribution 4.0 International License.