As AI continues to transform the advertising landscape, consumers are confronted with new forms of persuasion, personalization, and ethical challenges. This talk examines how consumers understand and respond to AI-enabled advertising. The first study shows that the rapid diffusion of AI has outpaced cultural adaptation, creating a cultural lag in consumer beliefs, literacy, public education, and policy, while also uncovering the coping strategies consumers use when navigating AI-generated content and AI-driven targeting. The second study focuses on ethical boundary violations, investigating consumer reactions to stereotypical advertisements produced by AI. Together, these studies offer insights into how consumers interpret AI’s role in advertising, attribute responsibility for AI-generated outcomes, and negotiate emerging ethical concerns. The findings advance theory on consumer responses to AI and highlight implications for responsible advertising practice, consumer education, and AI governance.