The integration of artificial intelligence (AI) and design has given rise to “design intelligence (DI),” an ecosystem encompassing both AI applications in design (AI for design) and the intelligent design of AI systems (design for AI). Despite growing interest in AI and design, existing studies often address these two perspectives separately, creating a significant gap in the literature. This evolving field highlights the pivotal role of AI literacy in ensuring the responsible use and development of AI-driven design technologies. This article presents a comprehensive literature review synthesizing research across AI literacy, AI-driven design for design (AiDD) and DI. Drawing on educational research, design thinking, and AI implementation studies, this review proposes a novel layered framework for AI literacy, tailored to the DI context. The findings identify AI literacy as a foundational element for effective engagement with these AI-driven design frameworks. Enhancing AI literacy among diverse stakeholders could improve understanding, adoption, and ethical application of these technologies. The analysis reveals a reciprocal relationship between AI for design a
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