Artificial intelligence for advancing smart cities
Artificial Intelligence (AI) is rapidly becoming a key tool for decision-making in cities. From traffic control
and energy management to housing policy and citizen services, AI enables cities to process vast streams
of real-time data and act with greater precision, speed, and foresight. However, integrating AI into public
policy decisions also raises critical questions about governance, ethics, equity, and accountability. Without
careful ex ante analysis, cities risk adopting technologies that might inadvertently entrench inequalities or
compromise privacy. Better understanding how AI plays out in social and institutional contexts in cities helps policymakers ensure that these tools serve the public good.
In this context, this issues note aims to support policy dialogue and facilitate international knowledge
exchange between national and local policy makers on how AI could help better plan, manage and govern smart cities, drawing on the expertise of OECD member countries. The note seeks to highlight how cities are currently using AI for advancing smart cities and, in turn, sustainable urban development, as well as identify the challenges and limitations they face. The final goal of this note is to support city governments in adopting AI to ensure that their investments in AI drive resilience and good governance.
This issues note builds on desk research examining how AI can help address key urban development
challenges, such as urban mobility, housing, land use, social inclusion, environmental preservation,
economic development, governmental efficiency, urban resilience and safety.
A set of cities has been selected as ‘light case studies’ to showcase good practices, based on interviews with local officials. The analytical framework guiding these case studies focuses on two main dimensions: (i) the overall urban context in terms of objectives and challenges; and (i) AI assets for urban development (including data, models, infrastructure, and skills), enabling conditions for AI diffusion (including governance financial arrangements, stakeholders engagement), and associated risks and benefits. This ‘Issues Note’ supported the discussion during the 5th OECD Roundtable on Smart Cities and Inclusive Growth on 27 October 2025, and was subsequently revised with key insights from the Roundtable.
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