In terms of resource depletion and energy use reduction and carbon emissions, the construction industry is now at a crossroads. With AI, the development along with sustainable design and building techniques revolutionizes previously mentioned problems. Through AI solutions, automatic process control, optimization of resources, enhanced decision-making, and efficient delivery of the project are now made possible. In the paper, a focus has been placed on utilizing AI in the construction industry, with sustainability aims of waste and carbon emission and energy use while converting traditional means into a greener environment. It views whether artificial intelligence, such as methods like digital twins, predictive maintenance, BIM, and ML algorithms, would improve the processes of sustainable design and construction. Case studies that highlight AI and IoT-enabled smart systems to improve energy management, resource optimization, and environmental monitoring are also included in the research. The research has further emphasized that although there are all these advancements, challenges like high implementation costs, data security concerns, and resistance to change will still prevent wide-scale adoption. The paper outlines future directions: cost-effective AI solutions, better data privacy measures, and collaborative initiatives that would help overcome the mentioned challenges and spur sustainable innovation in the construction industry. In exchange for these benefits, serious challenges to widespread adoption exist, including high implementation costs, the need for a trained workforce, data security concerns, and—but most importantly—resistance to change. In the future, effective solutions to AI in an affordable manner must include data security concerns and integration of AI into various regulatory frameworks under cooperative efforts.