The escalating integration of Artificial Intelligence (AI) has brought significant shifts in the workplace environment. This paper aims to explore the relationship between psychological contracts, job insecurity, employee engagement, and also AI's potential moderating effect on these connections. 212 samples were collected from employees working in different industries in Da Nang, Vietnam. The measurement model was assessed with PLS-SEM using SmartPLS. The study reveals that psychological contracts and employee’s job engagement is positively associated. However, this relationship is weakened in the presence of AI technologies. Based on research findings, the authors recommend solutions for companies that plan to integrate AI into their operations system so that employees’ wellness is supported and a smooth transition to the AI-driven future of work is ensured. The study contributes to the literature of employees’ wellbeing at work and provides meaningful implications for the ongoing dialogue on the sustainable use of AI aiming for Sustainable Development Goal 8.