As the application of artificial intelligence (AI) in the workplace increases, investigating its impact on work engagement is crucial for optimizing human resource management and enhancing organizational productivity and competitiveness. Based on the Conservation of Resources theory, this study investigated whether AI usage exhibits a double-edged sword effect on work engagement and examined the moderating role of core task characteristics substitution in this relationship. A two-wave study was conducted among 279 employees from China, and Hayes's PROCESS macro was used to test the moderated mediation model. The findings indicated that (1) AI usage enhances work engagement by increasing psychological availability and indirectly increases work engagement by suppressing work alienation; (2) core task characteristics substitution diminishes the enhancing effect of AI usage on psychological availability and the inhibiting effect of AI usage on work alienation; and (3) overall, AI usage tends to suppress work alienation, demonstrating an empowering effect. However, under conditions of high core task characteristics substitution, AI usage can increase work alienation, revealing potential negative effects. The findings enrich our understanding of the complex impact of AI usage on work engagement and offer valuable insights for managers to improve employee experiences in the AI era.