Artificial Intelligence (AI) has fundamentally restructured commercial brand communications by enabling sophisticated hyper-personalized marketing tailored to real-time consumer behaviors, preferences, and algorithmic profiles. While personalized algorithms enhance promotional relevance and persuasive efficacy, they simultaneously introduce critical concerns surrounding data privacy, tracking practices, and corporate transparency. This empirical study examined how AI-powered personalized marketing operates as a digital persuader and evaluated its specific impact on building consumer trust among Generation Z consumers in Vijayawada, Andhra Pradesh. Employing a quantitative descriptive research design, primary data were collected through a structured 30-item questionnaire administered to a sample of 87 Generation Z respondents using convenience sampling. Statistical analysis encompassed percentage distributions, frequency analysis, mean response evaluation, and Pearson bivariate correlation analysis. The empirical results demonstrated high digital marketing exposure, with 64.4% of respondents explicitly aware of AI-driven personalization mechanisms and 63.2% confirming the perceived relevance of customized digital promotions. Crucially, 59.8% of respondents indicated that relevant AI personalization enhanced brand trust. Inferential analysis revealed a statistically significant positive relationship between AI personalized marketing and consumer trust (r = 0.584, p < 0.001), as well as a strong positive correlation between privacy-transparency mechanisms and brand trust (r = 0.612, p < 0.001). The findings underscore that digital persuasion succeeds among Gen Z when algorithmic capability is balanced with transparent data practices and consumer control, offering key strategic insights for modern digital marketers.