The intersection of digitization and decarbonization is shaping global trends, particularly through advancements in Artificial Intelligence (AI) and the pressing need to address climate change. AI can play a crucial role in enhancing efficiency and tackling complex challenges, including those related to climate mitigation and adaptation. This chapter examines AI’s potential to support decarbonization by optimizing energy use, improving climate predictions, and advancing clean technologies. However, challenges persist, such as the energy demands of AI, misalignment between investors and developers in climate technologies, and uncertainties introduced by recent geopolitical and trade tensions. These factors complicate the landscape, affecting investment flows and the pace of technological deployment. The chapter emphasizes the importance of policy support, development of an effective carbon market, and innovative financing approaches to navigate these uncertainties. It also highlights AI’s role in accelerating the development and deployment of climate solutions, while recognizing the need for careful management of AI’s broader societal impacts. Overall, the chapter suggests that with strategic efforts and ongoing innovation, AI can contribute positively to the global effort toward a sustainable, decarbonized future, despite the challenges posed by the current geopolitical and policy environment.