The release of ChatGPT in November 2022 has sparked discussions about integrating Generative Artificial Intelligence (GenAI) into teacher education. Teacher educators, as key facilitators of pre-service teacher learning, play a critical role in shaping the successful adoption of GenAI. Their perceptions guide curriculum redesign, define promoted practices, and shape how pre-service teachers experience educational uses of GenAI tools, potentially multiplying its impact across future classrooms. This mixed-methods study explored Danish teacher educators’ perceptions of GenAI (n = 91), focusing on its transformative potential and the knowledge pre-service teachers need to acquire. Innovative methods, including GenAI-supported thematic analysis and Natural Language Processing, were used to analyze qualitative and quantitative survey data. Findings reveal diverse perceptions, ranging from enthusiasm for fostering innovative teaching to concerns about ethics, assessment, and safeguarding basic skills. Concerning GenAI's potential, three key themes emerged: AI literacy, AI didactics, and AI assessment. Regarding required knowledge, teacher educators emphasized multifaceted AI literacies (AI as a teaching tool, as teaching content, and as a learning tool) framed within ethical, cultural, and democratic contexts. Mediation analyses showed that GenAI use mediated the link between both intrinsic motivation and confidence, and perceptions of its potential. Importantly, teacher educators identified a pressing need for both formal professional development and informal, collaborative learning opportunities. This study extends the TPACK framework by incorporating the triadic nature of AI literacy and emphasizes the importance of preparing educators to engage critically and responsibly with GenAI in education.