Throughout history, new technologies have triggered people’s fears, often arriving cloaked in controversy around the threat to society. Now it is AI’s turn. While the concerns are justified and deserve to be addressed, history also tells us a broader truth: while technological change can cause disruption, it also unlocks enormous opportunity. This is the story now unfolding in cities around the world.
To understand how cities are using AI and leveraging it for the public good, ThoughtLab, a leading global research firm, partnered with urban leaders from government, business and academia on a benchmarking survey of 525 officials across 214 cities. This was supplemented by an analysis of 212 published city AI plans, and interviews with more than 50 urban experts, covering 331 municipalities across every region and level of development. What we found is real momentum: city leaders see AI not just as an efficiency tool, but as a way to make government more, not less, human.
That starts with linking data across departments, so cities can replace fragmented, reactive processes with coordinated action. Residents no longer need to navigate multiple disconnected systems to get help, and public employees are freed from routine tasks to focus on complex human problems. For Nicole Coughlin, CIO of Cary, North Carolina, AI offers the opportunity to “fundamentally rethink how government works.” City leaders agree on the scale of the opportunity: nearly two-thirds (64%) see AI as a key competitive driver for their city, 60% expect it to deliver more personalized, frictionless services, and over half aim to put people at the center of their AI strategy.
Putting Residents First
This “people-first” AI shift is already visible across the seven urban domains where cities are leveraging AI, including government administration; safety and security; digital and physical infrastructure; energy and the environment; transport and mobility; health and education; and economy and industry. Adoption runs deepest where the business of running a city is most established, and thinnest where success depends on complex coordination, specialized data and equity-centered design.
When it comes to safety and resilience, the area where AI adoption is most widespread, Seoul is piloting an AI chatbot that gathers details on emergency calls by voice and flags the most urgent for operators. In government administration, Honolulu’s CivCheck tool has cut AI-assisted plan-review cycles by 58%, saving permit applicants more than 40 days on average. Gold Coast uses predictive pipe maintenance to catch leaks before they become costly failures, and New York’s transit authority applies predictive maintenance to fix bus faults before they disrupt service.
Even in areas where adoption lags, such as health and education, cities are finding ways to deliver tangible public value and benefits. Helsinki’s Hester AI, for instance, helps residents find online health and social-service guidance, ensuring support reaches the most vulnerable in society.
Structural Barriers
But capturing value from people-first AI is not easy. Eight in ten cities cite long-term costs, competing budget priorities, limited AI skills and talent, and difficulty justifying ROI as major hurdles. The bigger barrier for many, however, is public distrust, cited by 68% of cities as among their biggest challenges, reflecting public concerns about surveillance, dehumanized services, bias and loss of control.
Successful cities tackle these concerns head-on, treating them as a governance issue rather than a communications problem. That means disclosing where AI is used, as Amsterdam and Helsinki do with public algorithm registers; keeping humans accountable for high-impact decisions, as Seattle requires for generative AI outputs; and protecting privacy by design, as Raleigh’s traffic system does by operating without identifying individuals. Crucially, it means designing for inclusion, explaining benefits clearly and countering misinformation directly, as New York City does by funding 22 community organizations to deliver AI literacy education.
Becoming a True AI “Leader”
These examples show what is possible when cities become people-first AI “Leaders” – the most advanced category of our four-stage AI maturity model – referring to cities that scale AI broadly on strong foundations of data, governance and trust. We identified 38 such Leaders across five continents, and what sets them apart is not technological superiority, but a human-centric mindset. They identify resident needs first, build a structured, long-term vision tied to people-first outcomes, prioritize governance from the outset, and treat people, not technology, as the real constraint. Ninety-two percent of Leaders train staff on ethical AI, and 97% identify the skills their workforce will need before they need them. Leaders do not go it alone: 95% build a broad partner ecosystem from across the public and private sectors.
The payoff from this approach is clear. Leaders see a 99% average ROI on AI investment, compared with 42% for other cities, and recoup that investment 11 months faster. They are nearly three times more likely to report social equity benefits and 1.8 times more likely to build public trust.
Becoming a people-first, AI-powered Leader, however, cannot be achieved in a single leap. It requires structured planning, anchored by clear metrics, guardrails and responsibilities. Our research revealed nine steps that cities can take to become an AI leader:
- Assess where your city stands in its AI journey
- Set an outcome-led AI vision
- Build accountable leadership and governance
- Start with high-value urban challenges
- Address citizens’ concerns early
- Design with people rather than simply for them
- Build the shared foundations for scale
- Equip the workforce with AI skills and tools
- Measure and communicate public value throughout the journey
Our research points to a bright future for cities. Not only are they already leveraging AI to better meet resident needs, by implementing the safeguards needed to shore up public trust, counter misinformation, reduce inequality and minimise risk, they are laying the groundwork for future success. The cities that take the lead over the coming decade will not necessarily be the ones with the biggest budgets or the most sophisticated technology. They will be the ones that manage risk, prioritize trust, and put people at the center of every decision they make.
This article draws on Building a People-First, AI-Powered City, a global study conducted by ThoughtLab in collaboration with Dell Technologies, NVIDIA, Microsoft, FedEx, FTI Consulting, GM, Intel, and Itron. For further information, please contact Program Director Lou Celi at [email protected].
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