ARTIFICIAL INTELLIGENCE AND SUSTAINABLE DEVELOPMENT: EXPLORING THE INTERSECTION OF TECHNOLOGY, BUSINESS AND ENVIRONMENTAL RESPONSIBILITY WITH THE MEDIATING ROLE OF AI-DRIVEN RESOURCE EFFICIENCY

Background: As developing economies advance in their digital transformation efforts, artificial intelligence (AI) has transitioned from merely a tool for routine automation to a fundamental strategic element driving organizational change. Nevertheless, there is a lack of empirical research examining how the intensity of AI adoption impacts corporate sustainability performance, particularly through operational mediators such as resource efficiency within the service sectors of these economies. Objectives: This study aims to empirically explore both the direct and indirect relationships between the intensity of AI adoption and corporate sustainable development performance, highlighting resource efficiency driven by AI as an essential mediator. Methods: A quantitative cross-sectional design was utilized, collecting primary data from 384 managerial participants across three key Indian service sectors: Banking & Financial Services, IT & Technology Services, and Healthcare Services. A comprehensive two-step methodology involving Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) was employed using 38 items on a Likert scale. Results: The measurement and structural models demonstrated an excellent fit (χ²/df=1.046, CFI=0.998, TLI=0.998, RMSEA=0.011). The results indicate that the intensity of AI adoption has a significant positive effect on both resource efficiency (β=0.581, p<0.001) and corporate sustainable development performance (β=0.438, p<0.001). Additionally, AI-driven resource efficiency serves as a meaningful mediator in this relationship (β=0.487, p<0.001; indirect effect = 0.283). Conclusion: These findings offer valuable insights for corporate leaders and policymakers involved in India's national digital initiatives, emphasizing that integrating AI into service operations can enhance resource allocation while promoting sustainability across multiple dimensions.