In this study, we delve into the structural and electronic intricacies of 2D aluminum nitride quantum dots (AlN-QDs) and their derivatives. Through detailed analysis, we uncover notable variations in bond lengths upon passivation with elements such as fluorine (F) and hydroxyl (OH) groups, with the latter exhibiting a particularly intriguing stability profile with a binding energy of 5.171 eV. Our investigation reveals a substantial energy gap of ∼5 eV in AlN-QDs, indicating enhanced electron confinement and optimal conditions for semiconductor applications. Furthermore, we elucidate the electron donation properties of nitrogen atoms and electron acceptance tendencies of aluminum atoms within AlN-QDs, shedding light on their unique electronic structure. Quantum stability assessments unveil charge distribution asymmetries and variations in electronegativity, contributing to a deeper understanding of AlN-QDs' robustness. We also demonstrate a significant enhancement in electrical conductivity, notably with AlN-QDs-surf-2CO exhibiting remarkable performance. Additionally, our study showcases AlN-QDs-OH's exceptional adsorption capabilities, evidenced by significantly higher adsorption energies for small organic compounds, highlighting their potential as highly effective sensors. Optical investigations further reinforce these findings, revealing distinct shifts in absorption spectra upon adsorption, which underscore the substantial impact of adsorbates on AlN-QDs' optical properties
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