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This research aims to study the relationship between AI-driven HRD strategies, Employee Engagement, and Employee Retention within Bangkok, Thailand. The samples of this study were 120 HR Staff in 17,013 Medium Enterprises in Bangkok, Thailand. The data analysis revealed that the model fit with the empirical data (χ2 = 38.083, df = 40, χ2 /df = .952, p = .557, GFI = .951, AGFI = .904, CFI = 1.000, TLI = 1.006, RMSEA = .000, RMR = .013, NFI = .936) The research reveals that the context of AI with the potential to enhance HRD efficiency and offer personalized learning opportunities; its implementation can inadvertently cause discomfort among employees, leading to a decline in Employee Engagement. This discomfort may happen from employees' perception of AI tools as impersonal or invasive, potentially leading to disconnection from their work. Such negative impacts on Employee Engagement can indirectly influence Employee Retention negatively, as disengaged employees are often less satisfied and motivated. However, the study also affirms the positive relationship between Employee Engagement and Employee Retention, emphasizing the need for high engagement levels for bolstering retention, even in an increasingly AI-driven environment. Limitations of the study include its restricted geographical scope, skewed demographic representation, and cross-sectional design that does not capture potential changes in perceptions over time. Future research could expand the geographical area, balance demographic representation, and use longitudinal designs. Organizations should implement AI judiciously, focusing on the human element and employee experience and maintaining high engagement levels to mitigate potential negative impacts.