The rapid evolution of technology has transformed library systems, with Natural Language Processing (NLP) emerging as a pivotal tool for enhancing knowledge management. This study aims to examine how NLP can improve the classification and management of tacit knowledge within AI-driven libraries, addressing the challenge of handling large volumes of unstructured data. The objective is to explore how NLP can optimize the retrieval, organization, and access to tacit knowledge, thus enhancing decision-making processes in libraries. The research adopts a conceptual design, synthesizing existing literature and theoretical models, including Information Processing Theory and Constructivist Theory, to propose a framework that integrates NLP with traditional knowledge management practices. Methodologies include a thorough review of recent advancements in NLP technologies and their applications within knowledge management systems. The study’s findings demonstrate that NLP significantly improves the accuracy and efficiency of knowledge retrieval by automating the processing of natural language data. This allows better access to tacit knowledge, supporting more informed decision-making. The outcomes of the study are twofold: it enhances existing knowledge management frameworks theoretically, and it provides practical insights for libraries to leverage NLP for greater operational efficiency and improved user experience. The study also underscores the need for future research on the real-world application of NLP and its ethical implications, such as data privacy and algorithmic bias.