Early Childhood Education (ECE) is a critical stage in a child's developmental journey. Accurate assessment of learning outcomes is essential to ensure children are adequately prepared for future academic success. However, traditional assessment methods have limitations. In contemporary times, Artificial Intelligence (AI) literacy has become an emerging topic in digital literacy education research. However, it is still under-explored in Early Childhood Education (ECE) since the AI curriculum for young children has just been designed in recent years. This paper explores the potential of Artificial Intelligence and how educators can leverage on it in enhancing assessment in early childhood education in Nigeria. It discussed AI benefits, challenges, and opportunities. The paper concludes by forecasting a growing number of age-appropriate curriculum and assessment tools for the ECE in the future. The paper also suggested that researchers and educators are to improve AI literacy research and learning design in early childhood education, training and retraining of teachers in AI teaching strategies, production of teaching guidelines since it is an emerging field and very fragile ,design a standardized assessment with global best practices and provision of adequate infrastructures for the effective implementation of AI program by the relevant agencies and ministries of the government in order to enable educators' leverage on AI for enhanced assessment in ECE in Nigeria among other points.