AbstractThe development of the power Internet of Things is currently underway, and a proposal for a semantic Internet of Things based on artificial intelligence algorithms is made to address the challenges in obtaining prior knowledge for heterogeneous data fusion, improving the real‐time performance of the ontology library, and enhancing the efficiency of manual labeling of instance object data in the power field. This proposal introduces an Automatic Semantic Annotation Method to provide an effective knowledge organization model for sensor systems. Data mining knowledge is utilized to drive ontology update and improvement, resulting in more accurate semantic annotation and enhanced machine understanding. Experimental results show that artificial intelligence algorithms can automatically extract concepts from sensory data and achieve automatic semantic annotation during ontology instantiation.