Summary: Advancements in technology offer opportunities for improving education through diagnostic and formative assessments. Artificial Intelligence (AI) plays a key role, with AI encompassing rule-based and machine learning-based systems. Machine learning-based AI can predict student outcomes and personalize assessment questions. AI tools also enhance educational experiences by offering tutoring, grading essays, and recommending instructional practices. However, concerns include privacy, the human dimension of education, and bias in AI-driven assessments. Policymakers must invest in research to address bias, fund technology-driven assessments, and support teacher professional development for effective assessment use.