From the context of China's "peak carbon dioxide emissions" and "carbon neutral" goals, this study determines whether digital development, as an important path of China's modern development, contributes to the achievement of China's "carbon neutral" goals. In addition, this paper examines whether digital development as an important path of China's modern development also contributes to realizing China's "carbon neutral" goal, while taking into account the internal logic and theoretical mechanism. Consequently, panel data of 267 prefecture-level cities and above nationwide for the time period ranging from 2003 to 2017 is constructed in this study, and used the two-way fixed effects model and instrumental variable estimation method to verify the intrinsic mechanism of digital development affecting carbon intensity. The study findings indicate that: (1) digital development exerts a significant inhibitory effect on carbon intensity, and overall, it demonstrates an "inverted U-shaped" relationship of promotion in the first place and inhibition in the subsequent phase. Moreover, the proposed inhibitory effect represents the marginally increasing trend; (2) promoting technological innovation serves as a significant mechanism for digital development to inhibit the carbon intensity; (3) most cities in China are still below the inflection point of digitalization; (4) optimizing the regional innovation environment effectively advances the inflection point of digitalization; thereby, implying that the government should pay due attention to the inhibiting effect of digitalization on carbon intensity. Besides, there is also a need to further optimize the environment of regional innovation, increase innovation investment, and smoothen the influence mechanism of technological innovation in order to quickly cross the "emission increase" period of digitalization development.