The integration of generative AI (GenAI) into professional practice presents a significant challenge for higher education: how to prepare graduates to work effectively alongside AI with critical judgement, ethical awareness, and sustained human expertise. Drawing on 15 semi-structured interviews with marketing practitioners, a field in which GenAI adoption has been rapid and extensive, this study examines the realities of AI-augmented work. Thematic analysis identified four key themes: (1) AI as a transformative collaborative enabler; (2) ethical and practical challenges; (3) skills and competencies for AI-augmented roles; and (4) evolving professional dynamics and future preparedness. While grounded in marketing, these findings point to broader questions for higher education concerning human–AI collaboration, critical judgement, creativity, and ethical AI use across professional domains. In response, the paper introduces the AI-Augmented Graduate Capability (AAGC) Framework, a practitioner-informed model structured around three core pillars (knowledge base, attitude development, and behavioural skills), underpinned by two cross-cutting dimensions: ethical AI use and human–AI collaboration. The paper argues that higher education must move beyond narrowly technical conceptions of AI capability towards developing graduates who can exercise judgement, responsibility, and creativity in AI-mediated environments.