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The rapid diffusion of Generative Artificial Intelligence (GenAI) in higher education is reshaping the development of key competencies such as critical thinking, creativity, and collaboration, while simultaneously raising concerns about learner autonomy, originality, and deep cognitive engagement. This study critically examines the extent of GenAI adoption among Nigerian undergraduate students, the challenges associated with its use, and its perceived effectiveness in supporting future competencies, drawing explicitly on students’ lived experiences. Guided by 21st Century Competency Theory and Sociocultural Learning Theory, the study conceptualises GenAI as a sociotechnical phenomenon that interacts with learners’ cognitive development, social contexts, and institutional environments. A qualitative research design was employed, with data generated through focus group discussions and semi-structured interviews involving 12 computer science undergraduates from six Nigerian public universities, selected through a multistage sampling approach. Findings indicate that students’ awareness of GenAI is largely shaped by social media, academic exposure, and peer networks. Tools such as ChatGPT, Gemini, Microsoft Copilot, and Grammarly are widely used for research, writing, and problem-solving. However, usage patterns reveal a tension between productive integration and cautious restraint, driven by concerns over output accuracy, plagiarism risks, and unequal access linked to connectivity and financial constraints. While participants recognise GenAI’s potential to enhance creativity and critical engagement, uncritical dependence is perceived as potentially undermining foundational skills. The study underscores the need for structured, policy-guided curricular integration to promote responsible and balanced competency development.