A 2025 study by the American Association of Colleges and Universities (AACU) finds that 95% of U.S. higher education leaders agree that teaching models will shift with AI’s rise, yet over a third report their institutions lag in adopting generative AI. Concerns include ethical implications, academic integrity, and unfamiliarity with how to integrate AI into curricula. This reveals a consensus on the need for pedagogical change, especially in business education, where AI's influence demands new strategies to prepare students and instructors for evolving professional landscapes.

This study investigates two core questions: (1) How is the role of higher education instructors shifting to embrace AI-centered learning? (2) How can educators best equip students with skills for the future workforce? Drawing on Vygotsky’s Zone of Proximal Development and the revised Bloom’s Taxonomy, we examine AI’s integration in both technically oriented (Finance) and conceptually oriented (Marketing) business courses. We employ action research methodology, using student reflections and researcher observations.

In an Advertising and Promotion course, students used Runway AI to co-create content, enhancing creative confidence through peer collaboration and AI-supported scaffolding. In Finance, students used ChatGPT to clarify complex concepts, finding it helpful for foundational learning but less effective for advanced technical support. These cases illustrate a shift from lecture-based instruction toward student-centered, co-created learning.

AI’s integration challenges the traditional role of instructors, repositioning them as coaches who facilitate inquiry, ethical reflection, and skill development. Students transition into active co-creators, navigating AI tools with growing autonomy. Yet concerns about over-reliance and academic integrity persist, prompting the use of frameworks such as the AI Assessment Scale (AIAS) and the promotion of digital literacy practices like lateral reading.

Industry collaboration and experiential learning further support this pedagogical shift. Surveys of business professionals emphasize critical thinking, ethical awareness, and real-world application of AI. Experiential learning, though underutilized, becomes transformative when paired with AI. Instructors must be supported through professional development, access to industry partnerships, and awareness of emerging regulations such as the EU AI Act and U.S. executive orders.

We argue for a three-dimensional redefinition of the instructor’s role: as coach, connector, and ethical guide. Supporting this shift is essential to equipping students to thrive in an AI-augmented business world.

Keywords: AI Integration, Instructor as Coach, Experiential Learning