In an era of rapid digital transformation, Artificial Intelligence (AI) has emerged as a strategic enabler of efficiency, competitiveness, and innovation for Small and Medium-sized Enterprises (SMEs). Despite research on the adoption of AI, scanty studies isolate the moderating role of Management Support for the adoption of AI on the performance of business within Nigerian SME a gap the study seeks to explore. The specific objectives are to assess the effects of perceived relative advantage, AI complexity, employee capability, government regulations, and job roles on AI adoption within firms. Descriptive statistics and inferential statistics were adopted. Research design, with structured questionnaires, was administered on 220 respondents. Simple random, heterogeneous purposive, and convenience sampling techniques were deployed to select the respondents. The data was analysed using Structural Equation Modelling (SEM). Perceived relative advantage (β = 0.496, p < 0.001) improves SME performance, while AI complexity has a negative impact on employee capability (β = -0.217, p = 0.038) and management support (β = -0.098, p = 0.041). Employee capability has a positive impact on management support (β = 0.461, p < 0.001), while management support has a significant positive impact on performance (β = 0.357, p = 0.002). The study concludes that AI adoption improves SME performance when combined with strong managerial commitment and workforce capability. It suggests that SME leaders invest in AI literacy, employee training, and supportive leadership systems to drive long-term growth in Nigeria's evolving digital economy.