Research aimed to test the influence of artificial intelligence-based factors on supply chain operations performance. The study also tested the mediating effect of operations adaptive capabilities and operations ambidexterity. For this purpose, collected data from 390 employees of SMEs in Saudi Arabia employing a convenient sampling technique. The survey based study used a cross-sectional research design and quantitative approach. The structural model results show that AI-based risk management, AI-based innovations, and generative AI have a positive and significant impact on supply chain performance. On the other hand, indirect mediating effect results also show that operations adaptive capabilities and operations ambidexterity innovation positively and significantly mediated among all AI-based indicators and supply chain performance of SMEs in Saudi Arabia. The study on the findings of AI-based factors to improve supply chain operations performance contributed empirical literature in the context of Saudi Arabian SMEs. Furthermore, study also highlighted the mediating effect of operations adaptive capabilities and operations ambidexterity innovation in strengthening the relationship between AI indicators and supply chain operations performance. These findings provide valuable insights for SMEs seeking to leverage AI technologies to improve supply chain operational performance.