Abstract: As the core of the new generation of information and communication technologies, artificial intelligence (AI) has become a key driver of China's high-quality economic development. Using panel data from 285 prefecture-level cities in China from 2007 to 2022, this study investigates the impact of AI on high-quality economic development and explores its underlying mechanisms. The results show that AI significantly promotes high-quality economic development, and the findings are robust across multiple tests. Mechanism analysis indicates that AI primarily facilitates development through entrepreneurial and innovation-driven effects. Threshold effect tests reveal that the impact of AI exhibits nonlinear characteristics depending on the levels of AI development, industrial agglomeration, and informatization. Heterogeneity analysis shows that AI exerts a stronger positive effect in eastern regions, large cities, economically advanced areas, and regions with higher technological capabilities. Based on these findings, the study recommends further integration of AI with high-quality economic development, the stimulation of AI-driven entrepreneurship and innovation, increased fiscal support and policy guidance, the removal of technological application barriers, and the promotion of deeper synergy between AI and economic development to achieve sustainable regional growth.