We investigate how the twin transition (digital & green) unfolds within firms by relating investments in digital technologies to the propensity of eco-innovating production processes and models. Extending previous studies on Information Technologies and eco-innovation, and drawing from recent research on Industry 4.0, we posit that digital technologies should enable eco-innovation across the board. However, a greater eco-innovation impact is expected from Artificial Intelligence and from bundling digital investments. Using the new Permanent Census of Firms of the Italian National Statistical Office, we test our hypotheses on a large sample of more than 150,000 firms. Results confirm that the contribution of digital technologies to firm’s eco-innovation is mainly driven by investments in AI, while investments in other digital technologies work more selectively. Moreover, new eco-innovative production processes and models benefit from bundling investments in different digital technologies.