Artificial intelligence (AI) is reshaping electricity systems by optimizing production and grid performance while also driving new electricity demand through data centers running generative models. As both an enabler of decarbonization and a source of growing energy use, AI creates opportunities for efficiency and inclusion but also heightens socio-technical risks tied to rising electricity consumption and governance gaps. This policy brief examines these dual dynamics and emerging trends across the energy value chain, with a focus on Latin America and the Caribbean. It concludes with policy recommendations to align AI deployment with climate goals, equity, and sustainable energy transitions.