Innovation, decision-making, and operational efficiency in manufacturing systems are all being transformed by the quick adoption of artificial intelligence (AI). Implementing AI on its own, however, does not ensure better organizational performance. With an emphasis on organizational culture and sustainable practices, this study explores the relationship between AI adoption and performance outcomes in Hyderabad City's manufacturing sector. Based on the framework of sustainable digital transformation and socio-technical systems theory, the study investigates whether a culture that promotes adaptability, learning, and teamwork—along with sustainability-aligned tactics—improves the efficacy of AI initiatives. A structured questionnaire will be used to gather information from operations managers, AI project leads, and sustainability officers. The suggested relationships will be examined using structural equation modelling, or SEM. It is anticipated that the study will show how sustainability and cultural alignment enhance the effect of AI on organizational performance, underscoring the discrepancy between theoretical advantages and real-world implementation challenges. The study contributes by providing empirical insights pertinent to manufacturing companies functioning in a more volatile economic climate where effective production and prudent resource use are essential. The results are intended to assist decision-makers in developing sustainable and culture-driven strategies to optimize AI efficacy.