This chapter argues for the concept of critical AI literacy as a necessary corrective to prevailing industry-driven frameworks of AI literacy that emphasize tool use, efficiency, and job-readiness. While mainstream AI literacy often treats artificial intelligence as a set of neutral technologies to be mastered, critical AI literacy situates AI as a sociotechnical assemblage shaped by political, economic, environmental, and cultural forces. It highlights the need to interrogate the assumptions embedded in the very term “artificial intelligence,” to resist technodeterministic narratives, to situate AI within larger sociocultural discourses, and to prepare all stakeholders to recognize when refusal or resistance to AI is both valid and necessary. Drawing on media, data, digital, and civic literacy frameworks, the chapter outlines the core principles of critical AI literacy: understanding the limitations of AI systems, awareness of epistemic injustice, recognition of human agency, attention to power asymmetries in AI development, acknowledgement of AI as a complex assemblage, and awareness of critical AI literacy as an active practice. The chapter further examines the need for critical AI literacy across educational institutions, industry, civil society, and policymaking. By re-centering human values and challenging technodeterminism, critical AI literacy enables communities to interrogate, resist, and reshape the role of AI in society.