A Study on the Market Potential Enhancement Effect of Artificial Intelligence—A Perspective from Both Supply and Demand Sides

Artificial intelligence has become the core driving force of technological and industrial transformation, and its rapid market expansion heralds huge economic potential. This study sets out from the perspectives of both supply and demand, using panel data from 249 prefecture-level and above cities in China from 2007 to 2021 to conduct theoretical and empirical analyses. The research finds that artificial intelligence significantly enhances the market potential of cities by improving production efficiency, innovation, and resource allocation on the supply side, and by promoting changes in consumer behavior, increasing consumption capacity, and creating new demands on the demand side. The effect is particularly significant in non-provincial capital cities, technologically advanced cities, and cities with a high degree of Internet penetration. This study provides empirical evidence for cities to formulate development strategies and optimize industrial layout, which is conducive to promoting the sustainable development of urban economies, enhancing competitiveness, and helping the national economy to steadily advance in the wave of artificial intelligence.