Artificial intelligence is reshaping labour markets globally, yet its consequences for youth employment in low-income African economies remain contested between displacement and augmentation accounts. This study examined the impact of artificial intelligence on the job market among youths in Lubaga Division, Kampala. Adopting a positivist philosophy and a cross-sectional survey design, data were collected through enumerator administration from 384 youths aged 18 to 30 selected via multistage sampling across the division's parishes. A structured questionnaire measured four artificial intelligence dimensions, namely task exposure and automation risk, AI skills acquisition and digital literacy, access to AI-enabled work platforms, and AI awareness and adoption in the workplace, against job market outcomes assessed through employment status and security, earnings, skills relevance, and perceived future prospects. Data were analysed using descriptive statistics, Pearson correlation, and multiple regression in SPSS version 26. Findings revealed that AI awareness recorded the highest mean while AI skills acquisition recorded the lowest. Task exposure correlated negatively with job market outcomes (r = −0.548, p < 0.01) while the three capability dimensions correlated positively, with AI skills acquisition strongest (r = 0.673, p < 0.01), followed by access to AIenabled platforms (r = 0.612, p < 0.01) and workplace adoption (r = 0.529, p < 0.01). The regression model was significant, F(4, 366) = 74.16, p < 0.001, explaining 44.8 per cent of variance, with AI skills acquisition (β = 0.348) dominant. The findings situate within evidence that 50.9 per cent of Ugandan youth are neither employed nor pursuing education and that national unemployment rose from 9.4 per cent in 2014 to 12.6 per cent in 2024 (EPRC, 2024), and corroborate the augmentation account whereby workers with AI expertise command wage premiums of up to 56 percent (PwC, 2024, cited in AfriCatalyst, 2025). The study concludes that AI's youth labour market impact operates principally through the skills divide rather than through displacement, and recommends AI skilling integration, platform access expansion, and adoption of the complementarity principle articulated in Uganda's international labour position.