This study explores artificial intelligence (AI)-mediated participatory design integrating biomaterials and digital fabrication to co-create speculative artifacts grounded in lived experiences. The present study involves experimentation with biomaterials, exploring the intersection of image-based generative AI, participatory, and co-creative methodologies within a design framework that reimagines lived experiences shaped by identity-based exclusionary processes. Rather than pursuing AI-driven discovery of new materials, this study positions design as a mediating process among human experience, critical reflection, biomaterial exploration, and digital fabrication. The research introduces a three-stage workflow (co-creation, fabrication, and materialization) that employs AI as a mediating tool between subjective narratives and tangible speculative artifacts. During the co-creation stage, participants shared their personal experiences through open-ended surveys, text-to-image generative AI visualization, and algorithmic three-dimensional (3D) modeling. This process enabled participants to speculatively reimagine lived experiences of social exclusion, demonstrating how AI can support new modes of participatory and social engagement. During the fabrication stage, digital models were translated into physical counter-molds through 3D printing and subsequently cast in silicon, reaffirming the reciprocal relationship between digital and craft-based production. The materialization stage explored biomaterial compositions informed by participants’ narratives and materialities, incorporating hair, wood ash, and plastic waste into biomaterial compositions grounded in circular economy principles. The resulting artifacts function as speculative objects that incite interpretation beyond fixed symbolic representation. This study contributes to ongoing discussions in digital fabrication, material design, and critical craft by demonstrating how AI-mediated participatory co-creation can foster ethically conscious, socially engaged, and materially grounded design practices. Future work may extend this approach to larger collective settings and further explore the integration of biomaterials and AI within ecological and inclusive design frameworks.