Ambient Intelligence is the vision of future in which environments support the people living in them. This environment is self-effacing, interconnected, adaptable, dynamic, embedded, and intelligent. The vision is to disappear the technology instead processors and sensors are integrated in everyday objects. To develop such an environment wherein technology is invisible to the user and environment directly communicates with the user. A completely interactive environment that could assists the users in every possible manner. In order to design and develop such an environment, there is a need to shift technology from machine to human communication to machine to machine communication (M2M). For such communication there is the requirement of real time data, energy and the decision making concepts which are considered as the main objectives that needs to be fulfilled. In this paper we present the major contribution of various researchers in this field. Further we have also discussed the major challenges and risks associated with such intelligent environment and a methodology to overcome with the challenges in AmI environment.