The pervasiveness of "Internet-of-Things" in our daily life has led to a recent surge in fog computing, encompassing a collaboration of cloud computing and edge intelligence. To that effect, deep learning has been a major driving force towards enabling such intelligent systems. However, growing model sizes in deep learning pose a significant challenge towards deployment in resource-constrained edge devices. Moreover, in a distributed intelligence environment, efficient workload distribution is necessary between edge and cloud systems. To address these challenges, we propose a conditionally deep hybrid neural network for enabling AI-based fog computing. The proposed network can be deployed in a distributed manner, consisting of quantized layers and early exits at the edge and full-precision layers on the cloud. During inference, if an early exit has high confidence in the classification results, it would allow samples to exit at the edge, and the deeper layers on the cloud are activated conditionally, which can lead to improved energy efficiency and inference latency. We perform an extensive design space exploration with the goal of minimizing energy consumption at the edge while achieving state-of-the-art classification accuracies on image classification tasks. We show that with binarized layers at the edge, the proposed conditional hybrid network can process 65% of inferences at the edge, leading to 5.5x computational energy reduction with minimal accuracy degradation on CIFAR-10 dataset. For the more complex dataset CIFAR-100, we observe that the proposed network with 4-bit quantization at the edge achieves 52% early classification at the edge with 4.8x energy reduction. The analysis gives us insights on designing efficient hybrid networks which achieve significantly higher energy efficiency than full-precision networks for edge-cloud based distributed intelligence systems.