In recent years, the new round of scientific and industrial revolution has been accelerating. Artificial intelligence (AI) technology is continuously reshaping all aspects of social production and life. The application of AI has become a key force in maintaining international competitive advantages and promoting high-quality economic development. In this context, how to promote the development and application of AI to support the sustainable development of enterprises is an important issue that needs urgent answers. However, most of the existing literature focuses on the role of AI technology applications in employment and other aspects. There are few studies on how AI applications can promote the sustainable development of enterprises, and there is a lack of research on the effectiveness evaluation of a series of current AI policies in China. Based on the data of Chinese A-share listed companies in Shanghai and Shenzhen from 2014 to 2023, this paper empirically investigates the impact of AI policies on corporate ESG performance and delves into the mechanism of action by using the National Pilot Zones for Artificial Intelligence Innovation and Application supported by the Ministry of Industry and Information Technology as a quasi-natural experiment. It is found that the AI policies represented by the National Pilot Zones for Artificial Intelligence Innovation and Application effectively enhance corporate ESG performance, and this conclusion still holds after using robustness tests such as the Bacon Decomposition Diagnostic and the Propensity Score Matching Method. Mechanism tests show that AI policies promote the agglomeration of intelligent industries, intelligent technology innovation, and the development of digital finance at the city level, which helps to promote enterprises’ AI applications. At the enterprise level, the green innovation effect, information disclosure effect, and management empowerment effect are important ways for enterprises’ AI applications to enhance ESG performance. Moreover, with the enhancement of the enterprises’ digital strategy leadership and media attention, the empowering effect of AI policies on ESG performance is strengthened. Heterogeneity analysis shows that compared with state-owned enterprises, large-scale enterprises, non-high-tech and heavy-pollution industries, AI policies have a stronger effect on improving corporate ESG performance in non-state-owned enterprises, small-scale enterprises, high-tech, and non-heavy-pollution industries. Compared with the existing literature, this paper has the following marginal contributions: First, this paper takes the construction of pilot zones as an opportunity to study how AI policies promote enterprises’ AI applications and enhance corporate ESG performance, which provides a new perspective for AI-related research. Second, it constructs a mechanism chain of AI policy-enterprise AI application-corporate ESG performance, and examines in segments how AI policy promotes enterprise AI application and how AI application enhances corporate ESG performance. It also examines the moderating effects of enterprises’ digital strategy leadership and media attention from the perspectives of internal strategic choices and external attention, which helps to clarify the mechanism of AI policies empowering corporate ESG performance. Third, the heterogeneity analysis based on the nature of ownership, enterprise scale, and the technological and pollution attributes of industries deepens the understanding of the effects of AI policies in different scenarios. This study reveals the impact of AI policies at the enterprise level and provides insights for giving full play to the effects of AI policies according to local conditions and enterprise characteristics. Based on the research findings, this paper proposes that the construction of the National Pilot Zones for Artificial Intelligence Innovation and Application should be accelerated, the experience of pilot zone construction should be summarized, the effects of AI policies should be leveraged to improve corporate ESG performance, so as to support the sustainable development of enterprises.