Modern Software Engineering with AI Essentials presents a rigorous and academically grounded exploration of contemporary software engineering, integrating established theoretical foundations with the emerging influence of Artificial Intelligence across the software lifecycle. Designed for undergraduate and postgraduate students, researchers, and professionals, the book offers a structured and systematic treatment of software engineering as both a technical discipline and a socio-technical practice. The text begins by establishing core principles of software engineering, including software processes, development lifecycles, professional practice, and the societal implications of software-intensive systems. It critically examines software failures, sustainability concerns, and the alignment of software engineering with global development objectives. Building on this foundation, the book introduces the dual paradigms of Software Engineering for AI and AI for Software Engineering, providing conceptual clarity on how AI systems are engineered and how AI techniques enhance traditional engineering activities. Subsequent chapters deliver in-depth coverage of process models, Agile and AI-assisted methodologies, requirements engineering, system modeling, architectural design, object-oriented development, testing, evolution, reuse, and project management. Each topic is addressed with an emphasis on formal methods, best practices, economic considerations, and tool support, ensuring alignment with current academic curricula and industry standards. The final section extends the discussion to future directions in the field, including AI-augmented and autonomous software systems, explainable and trustworthy AI, cybersecurity-first engineering, sustainable software development, and software for digital governance. Selected contemporary case studies, such as Microsoft Teams and Apple App Tracking Transparency, are used to contextualize theoretical concepts within real-world industrial practice. Through its balanced integration of theory, practice, and emerging research trends, Modern Software Engineering with AI Essentials serves as a comprehensive academic resource that prepares readers to analyze, design, and manage complex, intelligent software systems in a rapidly evolving technological environment.