AI Adoption and Carbon Intensity: Evidence from China

<jats:p>This paper investigates the relationship between AI adoption and carbon emission intensity. Using micro-level data from Chinese firms, we find that carbon intensity decreases following the adoption of AI. The effect is particularly pronounced among large firms, those headquartered in AI hubs, and those in high-carbon intensity sectors. We investigate several mechanisms and find that AI adoption is also associated with increases in energy management processes, green innovation, inventory efficiency, overall productivity, and the share of specialized labor.</jats:p>