Abstract Artificial intelligence (AI) is rapidly transforming urban landscapes, igniting promises of enhanced efficiency, sustainability, and citizen well-being. This chapter explore the diverse applications of AI across key domains in smart cities, encompassing healthcare, governance, transportation, energy, and safety/security. From optimizing traffic flow to tailoring public services, AI's transformative potential shines through. However, challenges regarding data privacy, algorithmic bias, and job displacement cast shadows on this bright future. This chapter critically examines both the alluring benefits and potential drawbacks of AI-powered smart city development. We emphasize the fundamental importance of human-cantered design principles, ensuring inclusivity and mitigating potential harms through robust ethical frameworks. Looking ahead, the chapter explores emerging trends like AI-driven urban planning and hyper-personalized citizen experiences, highlighting their potential to further enhance urban spaces. Finally, we underscore the imperative for collaborative efforts among stakeholders—government, industry, and academia—to effectively navigate the intricate landscape of AI and shape optimized, personalized, and inclusive cities of the future.