This chapter assesses the impact of introducing an AI system on the efficiency of service distribution and the quality of life (QOL) of the elderly in a community virtual nursing home in Shanghai, China. Using data from the Xinhong Street Virtual Nursing Home in Minhang District, we employ a difference-in-differences approach to analyze the changes in operational efficiency and quality of life indicators before and after the AI system was implemented. The results show that the AI system significantly improved operational efficiency and the physical health of the elderly. However, there was no significant improvement in social acceptance. The study also found that the AI system shifted the distribution of care services from proactive to responsive, leading to a change in care patterns. Overall, the study highlights the benefits of AI systems in improving service efficiency and health outcomes in elderly care while also raising questions about equitable service distribution and the need for human touch in care services.