This study utilizes panel data from 31 provinces in China spanning 2012–2022 to examine the impact of artificial intelligence (AI) development levels on labor employment. The main findings are: first, AI development demonstrates an overall positive employment effect, where job creation outweighs job displacement, indicating that AI technology can significantly promote the labor force employment. Second, AI exerts differentiated effects on employment structures: it generates greater job opportunities for skilled workers through creation effects, while exhibiting stronger substitution effects by reducing demand for unskilled workers. Furthermore, these differential impacts show regional heterogeneity, being particularly pronounced in Northeast and Eastern China but statistically insignificant in Western and Central regions. These findings are confirmed by a series of robust tests.