Based on 30 provincial-level panel data in China from 2013 to 2022, Focusing on the mechanisms research, AI affects employment in the service sector was examined. The results show that the impact of AI on service industry employment from a national perspective roughly shows a U-shaped relationship and still holds after considering indigeneity issues and robustness tests. In terms of micro-mechanisms, AI positively promotes service industry employment by affecting the structure of the service industry. The extended discussion suggests that the application of AI has a significant positive employment promotion effect on middle-skilled and high-skilled labor force employment in the service industry. In addition, the potential of modern service industry to absorb labor force employment continues to rise compared with traditional service industry. The extended discussion shows that the application of AI has a significant positive effect on the employment of middle-skilled and high-skilled labor in the service industry. In addition, the absorption potential of the modern service industry compared with the traditional service industry for the employment of the labor force continues to rise.