The Impact of AI Adoption on Electricity Output Growth Gap: Evidence from Listed Chinese Firms

The rapid expansion of artificial intelligence (AI) raises concerns that its energy demand, particularly electricity demand, may outpace economic growth. This study examines the effect of AI adoption on the corporate electricity output growth gap at the firm level in China. Using unique data on corporate electricity consumption, we find that AI adoption initially widens the electricity output growth gap, suggesting that energy demands exceed efficiency gains in the early stages. However, this widening effect diminishes over time and becomes statistically insignificant after approximately three years. This result remains robust to alternative variable definitions, the exclusion of firms relying on outsourced AI services or non-AI adoption samples, and endogeneity controls. The effect is more pronounced for firms located in economically advanced regions and operating in highly competitive industries. Our heterogeneity analysis reveals that the effect is stronger among manufacturing firms, non-state-owned firms, small firms, low-tech firms, and low-energy-consumption and low-pollution firms. Our findings highlight AI’s dual role in enhancing productivity while intensifying energy use in the short run. The study emphasizes the need for energy-efficient AI development to align technological progress with sustainable energy consumption.