The AI-powered learning loop in higher education

This study examines how generative AI tools affect business students’ academic performance by investigating whether flexible AI policies promote deeper learning, enhance self-efficacy and facilitate tacit knowledge acquisition in a Middle Eastern context, while ensuring efficiency and academic integrity. A qualitative, exploratory study observed 20 final-year business students in Kuwait during five in-class activities using generative AI tools. Semi-structured interviews complemented the researcher’s observations. Thematic analysis revealed patterns in benefits, challenges and learning processes, leading to the development of the AI-powered learning loop framework to explain academic performance outcomes. The study indicates that generative AI tools assist students by saving time, organizing ideas and enhancing understanding. While they reduce cognitive load and boost confidence, concerns about accuracy and ethical implications remain. A structured AI policy can promote responsible use and improve academic performance, supporting the proposed AI-powered learning loop model. The exploratory design and small sample size limit the findings to a private business college in Kuwait, reducing generalizability to broader higher education. Despite relying on self-reported data, the AI-powered learning loop framework provides a basis for future validation and research across diverse contexts. Higher education institutions can promote integrity by requiring students to explain and defend their AI-assisted work. This approach reduces academic dishonesty and enhances critical thinking. Faculty should integrate discussions and source validation into assessments. Clear AI policies from policymakers can alleviate student anxiety and foster essential skills for an AI-driven workplace. This study explores the effects of tolerant AI policies in Middle Eastern higher education by introducing the AI-powered learning loop, a framework connecting cognitive load, self-efficacy, tacit knowledge and academic performance. It offers insights for academics and policymakers on responsibly integrating generative AI to enhance sustainable learning outcomes.