This paper examines the AI interactions of students through the lens of Critical Digital Literacy (Darvin &Hafner, 2022; Darvin, 2017; Pangrazio, 2016) to gain insight into the ways students negotiate notions of power structures, agency, ideologies and inequalities of resources. While previous research on AI and academic practices have addressed the tensions and challenges associated with AI mediated writing, little attention has gone out to how this collaboration with AI as part of students’ academic practices reveals how students conceptualize critical aspects of their AI use. Instead of taking either student or AI as the focus of investigation, this paper focuses on how students conceive of power, agency, ideology and inequalities as mediated through the interaction with AI. Analyses of reflective video diaries were combined with focus group interviews with 20 undergraduate students in China to gain insight into their subject positions toward AI. The findings reveal a complex negotiation of agency, trust, and authorship, as students critically assess AI outputs, and concede to or reject power structures and ideologies invoked by the output of AI. These student-informed inferences of critical conceptions of ‘AI literacies’ provide important insights for pedagogical design and curriculum development.