Artificial intelligence (AI) has emerged as a pivotal force in organisational transformation. With enhanced communication capabilities, AI systems are evolving beyond supportive functions, stepping into decision-making and leadership roles. As remote work becomes the norm and efficiency remains crucial, AI provides a transformative edge to virtual teams (VTs) that rely on digital tools for collaboration. A leader’s presence is essential for cohesion, motivation, and the overall success of VTs, where physical distance and asynchronous communication pose challenges. This study employs a design science approach to develop an AI leader based on the “characteristics of effective VT leaders” as kernel theory. We developed an AI leader through three design cycles using expert interviews with VT members (N=24) and focus group discussions (N=28) involving VT members and AI experts. Our findings support the transition to AI leaders and suggest a fundamental redefinition of leadership roles that could reshape the future of work.