Recently, both AI and carbon emission reduction have captured an increasing attention from researchers and practitioners. However, few studies, if any, investigates how firms leverage AI to reduce carbon emission. To narrow this gap, we incorporate technology-, legitimacy-, and market competition-driven antecedents of corporate carbon performance into one model, and explore the effect of AI capability on corporate carbon emission reduction performance. Using a fine-granular (i.e., firm-level data) panel database, we found that: (a) corporate AI capability can significantly enhance corporate carbon emission reduction performance; (b) the positive relationship between AI capability and corporate carbon emission reduction performance can be strengthened when government environmental pressure and market competition is higher. Our study offers a holistic understanding of antecedents of corporate carbon emission reduction, advancing empirical literature on AI and carbon emission reduction.