["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn the context of the latest technological revolution and industrial transformation, Artificial Intelligence (AI) provides new impetus for the development of corporate ESG practices. This study, based on data from 2630 A‐share listed companies in China from 2010 to 2022, examines the impact of AI on corporate ESG performance and its mechanisms of action and explores the moderating effects of capital market financing environment. The results reveal that AI can notably enhance the ESG performance of listed companies in China. This finding is proven robust after robustness tests, including machine learning models. Based on information processing theory, the study further constructs a framework for mechanism analysis across the environmental, social, and governance dimensions. The results show that AI enhances corporate ESG performance through three channels: improving green innovation rate, enhancing price markup capabilities, and reducing agency costs. Heterogeneity analysis reveals that the enabling effects of AI on corporate ESG performance are more pronounced for technology‐intensive firms, non‐highly polluting firms, and firms in highly competitive industries. Further research suggests that optimization of the external capital market financing environment facilitates the empowering effect of AI on corporate ESG performance. This study provides practical insights for enterprises to effectively advance sustainable development through “AI+ ESG”, for regulatory bodies to refine sustainable governance systems, and for capital markets to innovate in financial services for technology.\n"]