The SM131 Business Ethics Simulation at Boston University redefined ethics education for over 450 first-year students by immersing them in a live, AI-driven ethical crisis involving Coca-Cola and PepsiCo in India. Students assumed stakeholder roles and engaged in high-pressure, Socratic dialogue to navigate real-world dilemmas around corporate responsibility, environmental impact, and power dynamics. Through role-based empathy, dynamic coaching, and original writing, students developed ethical fluency, stakeholder awareness, and leadership judgment. The simulation fostered deep learning, with 94% reporting increased understanding of tradeoffs and 73% naming it the most meaningful part of the course. Ethics became personal, urgent, and transformative.