Does artificial intelligence improve firms’ energy transitions? Evidence from Chinese listed firms

This study examines the role of artificial intelligence (AI) in promoting the transition toward sustainable energy in emerging markets within the broader context of global low-carbon initiatives. Using panel data on Chinese A-share listed firms from 2014 to 2024, we investigate the causal relationship between AI adoption and firms’ energy transition. The results show that AI significantly reduces reliance on traditional energy sources, supporting a shift toward cleaner energy structures. Mechanism analysis suggests that AI facilitates this transition by strengthening technological research and development, improving investment efficiency, and easing financing constraints. Further heterogeneity analysis indicates that the effect is more pronounced among non-state-owned firms, firms in non-polluting industries, and firms with stronger environmental governance. The findings remain robust after addressing endogeneity concerns through instrumental variable and propensity score matching approaches. Overall, the study provides empirical evidence that AI can support energy transformation by improving technological efficiency and accelerating the transition toward low-carbon development.