In recent years, Artificial Intelligence (AI) has played an important role in transforming digital commerce platforms through automation and personalized customer services. Many online commerce companies now use AI-based tools such as recommendation systems, virtual assistants and predictive analytics to improve customer experience and operational efficiency. Despite these technological developments, concerns regarding data privacy, cyber security, transparency and ethical use of consumer information continue to affect consumer trust toward online commerce platforms. The study focuses on consumer trust toward AI-driven digital commerce platforms with special reference to ethical and sustainable online business practices in urban and rural areas of Jammu and Kashmir. A descriptive and analytical research design was adopted for conducting the study using both primary and secondary sources of data. Primary data was collected through a structured questionnaire from 120 respondents belonging to both urban and rural areas of Jammu and Kashmir. Secondary information was gathered from journals, books, research articles, reports and relevant online sources related to artificial intelligence and digital commerce. Urban consumers demonstrated grater familiarity with online commerce applications such as Amazon, Flipkart, Myntra, Meesho and Nykaa because of better internet accessibility and digital awareness. In contrast, rural consumers showed comparatively lower confidence in online transactions due to concerns related to payment security, privacy and limited technological knowledge. On the other hand, rural consumers demonstrate lower awareness regarding online commerce systems and express concerns related to online payment security, misuse of personal information and lack of technological knowledge. Poor internet connectivity and inadequate digital infrastructure continue to remain major barriers affecting the adoption of digital commerce platforms in rural areas. The study indicates that transparent business operations, secure payment systems, genuine customer reviews and responsible AI practices play an important role in strengthening consumer trust and customer satisfaction. The findings also suggest that sustainable online business practices contribute toward improving long-term customer relationships and the credibility of digital commerce platforms.