Artificial Intelligence (AI) is increasingly being used as a strategic tool to make data-driven decisions, working as a complement to human decision-making. This leads to more effective processes and drives innovation in a better way, enabling a strong coordination between all the agents involved – such as managers, consumers, and partners. Digital transformation, which has AI at its core, has been disrupting companies’ operations by provoking significant changes on the value creation processes and business models firms adopt, with the increasing prevalence of digital platforms using mechanisms and technologies like AI and Machine Learning (ML). The beauty industry is no exception to this trend, and the potential for applying AI in such sector is enormous as it is a sector where there is a significant amount of data being produced across online platforms and social media channels. Furthermore, there are infinite needs of the cosmetics consumer to be fulfilled, hence there is a strong need for effective personalization and targeted marketing strategies. Despite the relevance of the topic and the considerable opportunities highlighted above, there is a scarcity of theoretical and empirical research on the field, which makes the present research question – How is AI impacting the beauty industry on making data-driven decisions? – pertinent and worth investigating. Due to the lack of academic studies on this topic, this dissertation has an exploratory nature, including two main parts: (i) a literature review based on an originally developed framework and (ii) a qualitative empirical study based on a multiple case study analysis. The data was collected through in-depth semi-structured interviews to top managers of two leading companies in the beauty sector – L’Oréal and Perfect Corp-, complemented by data from secondary sources. This dissertation had the following results: the interconnection between the latest technological trends, strong collaboration between all the agents and an effective Big Data management are critical to sustain an AI strategy to make relevant decisions in this sector.