Artificial intelligence is transforming the digital marketplace by reshaping how consumers perceive trust, interact with online environments, and make purchase decisions. This study examines how AI-driven personalization, predictive analytics, recommendation engines, and conversational interfaces collectively influence the journey from initial click to final conversion. While traditional digital marketing relies on static segmentation and rule-based logic, modern AI systems dynamically interpret user intent, emotional tone, browsing patterns, and contextual cues in real time. These capabilities not only streamline user experience but also reconstruct psychological drivers of trust, such as perceived transparency, service reliability, and cognitive ease. The paper evaluates how algorithmic decision systems modify consumer attention, reduce friction, and create persuasive purchase pathways that elevate conversion likelihood. It further investigates the ethical complexities of AI-mediated persuasion, highlighting concerns related to privacy, data exploitation, and algorithmic bias. By synthesizing recent empirical findings and industry practices, the study offers an integrated perspective on how AI technologies redefine the foundations of online consumer behaviour. The insights contribute to understanding the evolving digital trust landscape and provide strategic direction for businesses seeking sustainable and ethically aligned AI adoption