Micro, Small, and Medium Enterprises (MSMEs) serve as a key economic driver with significant potential to foster regional economic growth through the utilization of digital technology. This quantitative study aims to analyze the impact of artificial intelligence marketing, digital literacy, and business innovation on the marketing performance of 100 MSMEs in East Java, employing a survey method and SEM-PLS analysis (SmartPLS 4). The findings indicate that artificial intelligence marketing does not have a significant effect on the marketing performance of MSMEs in East Java. Conversely, digital literacy exerts a positive and significant influence on business owners' decisions to implement adaptive marketing strategies. Furthermore, business innovation demonstrates a positive and significant impact, emerging as the most dominant factor influencing marketing performance. Collectively, these three variables account for 81.3% of the variation in marketing performance; thus, it is concluded that product innovation and digital literacy proficiency play a more substantial role than the mere adoption of basic artificial intelligence technology in driving sustainable improvements in marketing performance.