A machine’s ability to exhibit a certain level of intelligence and perform functions that require human abilities is listed as the key feature of artificial intelligence. Artificial intelligence is currently developing and spreading very quickly with the tendency to change the ways we learn and teach. The application of artificial intelligence in education can be traced back to the use of computers, i.e. it has a fairly long history. In educational institutions, it is applied in various ways, from the automatization of administrative processes and tasks to the creation of curricula and educational materials, as well as to improve teaching and facilitate the learning process. Due to technological advancement and the increased processing power of computers over the last few years, artificial intelligence has started developing at an incredible pace. Despite this, there are only a few published works on the subject within the national context. The purpose of this paper is to point out the potential and (ethical) challenges of using artificial intelligence in education, its impact on teaching, and the possibility of it replacing teachers. To identify the current state of affairs and assess the impact and possibilities of using artificial intelligence in education, available and relevant literature was systematically reviewed and analyzed.