Teaching methods, learning environments, educational outcomes, and even the purpose of education are being reshaped by artificial intelligence (AI). Rather than abandoning the humanities, universities should transform them into Applied Humanities, just as linguistics evolved into applied linguistics, psychology into applied psychology, and mathematics into applied mathematics. Similarly, psychology helps us understand how prolonged interaction with AI affects human motivation, cognition, emotional well-being, and social relationships. Therefore, the challenge before universities is not to preserve twentieth-century educational models but to redesign humanities education for the twenty-first century. Universities, policymakers, higher education commissions, curriculum developers, and educators must work collectively to redesign curricula that transform traditional humanities into Applied Humanities.