Integration of artificial intelligence (AI) in digital identity creation has also introduced sophisticated avatar creation and safe storage. This paper presents a new AI-based system for creating personalized avatars with safe storage. The system, in the proposed scenario, utilizes deep learning methods like Generative Adversarial Networks (GANs) and Neural Style Transfer (NST) to create high-quality avatars from user data in terms of face information and body pose based on pose estimation pipelines like OpenPose and MediaPipe. This paper illuminates the uses of AI-empowered avatar generation in gaming, virtual reality, augmented reality, and online secure identity. Utilizing deep learning, encryption, and blockchain technology together, the suggested system provides naturalistic avatar generation and advanced data protection, privacy, and user control. Experimental results indicate the efficacy and scalability of the system with a suggestion for use in mass usage by multiple industries. Future research can then be directed towards enhancing avatar realism, computationally optimizing, and further developing the support for real-time rendering of avatars from dynamic scenes.