Artificial Intelligence (AI) is a field of rapid innovation and set to fundamentally transform numerous domains. In this context, we are confronted with significant ethical challenges, for example with respect to issues like fairness, bias, autonomy, disinformation, sustainability, safety, and human-machine interaction. In this Challenge, participating students practically explore how innovation in AI development can be aligned with ethical standards. The focus on ethical AI innovation is especially well-suited to CBL, as it involves complex sociotechnical questions that demand creative, experimental, and interdisciplinary thinking and collaboration. The Challenge also provides insights into the functioning of AI, with a special focus on generative models, and conveys important concepts and frameworks from inclusive design theory, innovation theory, and technology ethics. By interacting with a diverse set of external stakeholders, students gain insights into different domains and industries.