This paper examines how digital infrastructure affects agricultural upgrading in China’s edible fungi industry, focusing on the divergence between output expansion and unit value enhancement. Using a balanced panel of 28 Chinese provinces from 2019 to 2024, we apply a Two-Stage Least Squares (2SLS) approach, instrumenting digital infrastructure with the 1984 provincial fixed-line telephone penetration rate (first-stage F-statistic = 82.15) to address endogeneity concerns. The results reveal a clear asymmetry between quantity and quality outcomes. Digital infrastructure significantly increases total output (coefficient = 1.540, p < 0.01), primarily through improved market coordination rather than productivity gains. However, it produces no statistically discernible effect on unit output value. This divergence suggests that agricultural digitalization follows a stage-dependent pattern: basic connectivity effectively relaxes constraints on production scaling but is insufficient on its own to shift producers toward higher-value activities. Consequently, scale expansion may proceed without corresponding value creation, raising concerns for long-term economic and environmental sustainability. Achieving genuine agricultural upgrading therefore requires complementary investments in institutional capacity, downstream processing, and brand development alongside digital infrastructure deployment.