Artificial Intelligence (AI) literacy and competency in pre-service teacher education refer to a programme-level implementation that enables teachers to work with AI systems effectively, critically, and ethically across university coursework, school placements, and early-career practice. This includes not only capability, but also professional enactment, where teachers apply AI-related knowledge in context-sensitive and pedagogically grounded ways. AI literacy refers to a shared knowledge base for understanding how AI systems generate outputs, how to evaluate and verify AI-supported information, and how to reason about task–tool fit in relation to fairness, privacy, transparency, accountability, academic integrity, equity, and environmental sustainability. AI competency refers to the application of this literacy in routine professional tasks, such as designing and justifying AI-informed teaching, learning, and assessment, protecting students’ and school data, documenting decisions, and revising AI-supported materials after checking for reliability, transparency, accountability, and equity. Together, literacy and competency extend beyond personal use of AI by preparing future teachers to support students’ creative, critical, and ethical engagement with AI, while keeping classroom practice aligned with educational goals, objectives, and values.