<p>Current research often views generative AI (GenAI) with a goal-orientated lens, focusing either on teachers’ productivity or children’s skill development. This conceptual article challenges this lens by examining GenAI’s fluid role within typical teacher–child interactions in classroom environments. We argue that proximal processes remain the core of early development in GenAI-infused environments. With different complexity levels of GenAI integration, GenAI can shift dynamically from a technical tool to a collaborative facilitator in teachers and children’s meaning-making. This fluidity is moderated by ecological and sociocultural factors, including classroom activity types, teachers’ professional identities, and children’s community experiences. As GenAI integration evolves, teachers’ reflective and critical thinking will become increasingly central to effective pedagogies of protecting and promoting children’s agencies in learning. We conclude with a set of preliminary recommendations of GenAI integration to ensure GenAI supports, rather than dismisses, agency-driven, culturally, and developmentally appropriate learning in early childhood classrooms.</p>