Artificial Intelligence: A Solution to Enhance Sustainability in a Turbulent World?

This study examines the dynamic interrelationships among artificial intelligence (AI), sustainability (measured by the environmental, social, and governance uncertainty index, ESGUI), and geopolitical risk (GPR). Using a TVP-VAR-SV approach, we find AI’s impact evolves from increasing ESGUI due to energy demands to promoting sustainability as technology matures. Simultaneously, GPR initially raises ESGUI but later accelerates sustainable development through structural changes before fading. Furthermore, the AI-GPR relationship shifts from exacerbating tensions to fostering stability. By elucidating these time-varying dynamics, the findings offer policymakers valuable implications for harnessing AI as a key promoter of sustainability in an uncertain world.