The integration of Artificial Intelligence (AI) with the Internet of Things (IoT) has propelled technological innovation across various industries. This systematic literature review explores the current state and future trajectories of AI in IoT, with a particular focus on emerging trends in intelligent data analysis and privacy protection. The proliferation of IoT devices, marked by voluminous data generation, has reshaped data processing methods, providing actionable insights for informed decision-making. While previous reviews have offered valuable insights, they often fall short of comprehensively addressing the multifaceted dimensions within the AI-driven IoT landscape. This review aims to bridge this gap by systematically examining existing literature and acknowledging the limitations of past studies. To achieve this aim, the study uses a meticulous approach guided by established methodologies. The chosen methodology ensures the rigor and validity of the review, aligning with PRISMA guidelines for systematic reviews. This systematic literature review serves as a comprehensive guide for researchers, practitioners, and policymakers, offering insights into the current landscape and paving the way for future research directions. The identified trends and challenges provide a valuable resource for navigating the evolving domain of AI in IoT, fostering a balanced, secure, and sustainable advancement in this dynamic field.