AI should also be clearly recognised as a tool for achieving climate neutrality by 2050, so its development must be low-emission, renewable-energy-driven, and energy-efficient. However, this transition will not happen by itself, and much effort is still needed. If we really want to prepare for the realities of tomorrow, we must act now and fast, since yesterday has become today in many areas related to AI. Incentives, similar to the Green Deal or post-COVID-19 pandemic actions, are the right framework for not only unlocking the capacity of AI for energy transformation, but also for managing and regulating it in a smart way. This also applies to the ongoing COVID-19 pandemic, where AI is finding a variety of applications to manage changes in electricity demand (increased residential – decreased industrial/commercial) due to shifts in job patterns and lifestyles.

In this light, the chapter examines AI through the lens of the EU’s and Japan’s energy policies and climate actions. Because of both EU’s and Japan’s extensive research and development experience, coupled with their energy and climate policies, which include reaching net-zero greenhouse gas emissions by 2050, these two examples can be used to address the challenges of major world economies in the energy transition equipped with AI. In this context, the study juxtaposes primary documents from the past and present that are important to the development of AI in the EU and Japan. The chapter also examines the public response as well as related regulatory matters, including the “day-watchman” regulatory model as an example of a smart regulatory approach.