Decarbonizing Through Innovation: The Role of AI Investment in Reducing CO2 Emissions in the Top AI-Investing Economies

This research explores the effect of artificial intelligence (AI) investment on carbon dioxide (CO2) emissions relating to worldwide industrialization and environmental concerns. CO2 emissions have risen due to fossil fuel usage, leading to global warming, environmental degradation, and climate change. While most previous studies have concentrated on components such as economic progress, energy consumption, and technological improvement, little attention has been given to the impact of artificial intelligence on the levels of carbon dioxide emissions. Artificial intelligence technology enables systems to perform complicated duties including reasoning and decision making. This article intends to fill this research gap by examining the impact of AI on carbon emissions in the eight highest AI-investing countries (the USA, China, the United Kingdom, Israel, Germany, India, Canada, and Korea) from 2012 to 2022. OECD data on average trade, AI investment, and consumption-based CO2 emissions were analyzed in this study. The Augmented Mean Group (AMG) approach was employed to analyze the study findings, with the results showing that GDP had a beneficial influence on CO2 emissions in the Top AI-Investing Economies. The results also showed that AI investment and trade had adverse impacts on CO2 emissions. The findings supported the idea that investment on AI has a positive impact on decreasing CO2 emissions, thus leading to a more sustainable environment.