Artificial intelligence (AI) and augmented reality (AR) are being incorporated into interior design as a result of the growing need for individualized and effective living spaces. By offering real-time, interactive, and intelligent design solutions, this concept suggests an AI-Powered Smart AR Interior Design Assistant that improves space outfitting and organization. While AR technology allows users to realistically see and alter interior layouts in their real-world surroundings, the system uses AI algorithms for style detection, spatial analysis, and furniture optimization. The assistant makes recommendations for furniture placements, color schemes, and decor based on user preferences and available space by fusing computer vision and machine learning models. Through immersive design exploration made possible by the AR interface, users can make well-informed judgments without the need for physical trials. This solution offers a sustainable, individualized, and user-friendly approach to space management while cutting down on time, expense, and mistakes associated with traditional interior design. The concept shows how integrating AI and AR can result in smarter, more adaptable, and more appealing living spaces.