The academic landscape is evolving with the integration of generative AI technologies, creating a new era in teaching and learning processes. This study investigates the integration of artificial intelligence (AI) within pedagogical strategies and policies at leading universities. It delves into how higher education institutions are amending and shaping policies regarding AI implementation, focusing on pedagogical, ethical, and privacy considerations. By thoroughly analyzing AI policies across 25 top-ranked universities, this study identifies the dominant approaches and challenges institutions face in utilizing AI. Our findings reveal diverse strategies ranging from embracing AI tools to enhance teaching efficiency and student engagement to addressing ethical concerns such as academic integrity and data privacy. However, in almost all universities, faculty can determine how these tools are used in their courses. This approach could encourage innovation and creativity in AI implementation. On the other hand, it could lead to inconsistency in students' learning experiences in different courses due to a lack of standardization. The results emphasize the necessity for a balanced approach to fostering innovation while safeguarding academic values and ethical standards, considering instructors' and learners' voices. This study contributes to the ongoing discourse on AI in education by providing insights into the dynamic interaction between AI technology and educational policy, proposing guidelines for institutions to navigate this evolving landscape effectively.