Computational Thinking (CT) is a key skill set for students in higher education to thrive and adapt to an increasingly technology-driven future and workplace. While research on CT education has gained remarkable momentum in K12 over the past decade, it has remained under-explored in higher education, leaving higher education teachers with an insufficient overview, knowledge, and support regarding CT education. The proliferation and adoption of artificial intelligence (AI) by educational institutions have demonstrated promising potential to support instructional activities across many disciplines, including CT education. However, a comprehensive overview outlining the various aspects of integrating AI in CT education in higher education is lacking. To mitigate this gap, we conducted this systematic literature review study. The focus of our study is to identify initiatives applying AI in CT education within higher education and to explore various educational aspects of these initiatives, including the benefits and challenges of AI in CT education, instructional strategies employed, CT components covered, and AI techniques and models utilized. This study provides practical and scientific contributions to the CT education community, including an inventory of AI-based initiatives for CT education useful to educators, an overview of various aspects of integrating AI into CT education such as its benefits and challenges (e.g., AI potential to reshape CT education versus its potential to diminish students creativity) and insights into new and expanded perspectives on CT in light of AI (e.g., the decoding approach alongside the coding approach to CT).