The abrupt emergence and rapid advancement of generative artificial intelligence (AI) technologies, transitioning from research labs to potentially all aspects of social life, has brought a profound impact on education, science, arts, journalism, and every facet of human life and communication. The purpose of this paper is to recapitulate the use of AI in education and examine potential opportunities and challenges of employing generative AI for educational assessment, with systems thinking in mind. Following a review of the opportunities and challenges, we discuss key issues and dilemmas associated with using generative AI for assessment and for education in general. We hope that the opportunities, challenges, and issues discussed in this paper could serve as a foundation for educators to harness the power of AI within the digital learning ecosystem.