Ambient computing is an innovative technology that has gained significant traction recently. It involves integrating information technology into our daily routine subtly and unobtrusively. The technology that surrounds us interacts with us naturally and without requiring our conscious attention or explicit commands. This means that we can go about our daily lives while the technology works seamlessly in the background to provide us with the best experiences. This literature review provides an in-depth analysis of the rise of ambient computing, its key characteristics, enabling technologies, applications, use cases, challenges, and outlook. With the integration of artificial intelligence, ubiquitous computing, sensors, connectivity, and human-computer interfaces, ambient computing has the potential to fade into the background and provide seamless and contextualized experiences tailored to individuals' needs and situations. Ambient computing holds great promise in providing an enhanced understanding of the world and allowing us to be more productive and efficient in our daily lives. It has already found many applications, from home automation to healthcare and transportation. However, with all the benefits that ambient computing has to offer, there are still challenges that need to be addressed. These challenges include privacy, security, reliability, accessibility, and human-AI co-existence. Addressing these challenges is crucial to ensure ambient computing can be deployed responsibly and ethically. This review synthesizes current knowledge on ambient computing and highlights areas that require further investigation to promote informed discourse and responsible advancement of this emerging paradigm. Overall, the potential benefits of ambient computing are enormous, and it is essential to continue the research and development of this technology while addressing its challenges and risks.