Cities Leading on AI See Double the ROI of Peers and Stronger Social Outcomes

New ThoughtLab study of 459 cities shows that a people-first approach to AI will help cities drive social equity, trust, and sustainability

NEW YORK & BARCELONA, Spain--(BUSINESS WIRE)--While headlines warn of the risks of AI, cities are showing how to use it responsibly to improve public services and meet residents’ needs. A new global study from ThoughtLab finds that by putting residents at the center of their AI strategies, cities see twice the return on investment of other cities, along with stronger gains in public trust, social equity, and sustainability.

The study, Building a People-First, AI-Powered City, which ThoughtLab is presenting this week at Smart City Expo World Congress in Barcelona, is based on a survey of 525 senior officials in 215 cities, conducted in July and August 2026. It also draws on a review of 363 city AI plans and peer group discussions and interviews with leaders from government, business, and academia.

“Our analysis reveals a fundamental shift in how cities think about AI,” said Lou Celi, CEO of ThoughtLab and director of the research program. “City leaders see AI as a way to reinvent how government processes work, how services are delivered, and how cities anticipate and respond to residents’ needs. What’s most encouraging is that they are using AI in a way that strengthens public value, trust, and social equity.”

Who is leading, and why it matters

ThoughtLab economists built an AI maturity model that benchmarks cities across eight pillars of best practice, from designing AI around human needs and strengthening governance and cybersecurity to building AI-ready data, developing talent, automating processes, and expanding partnerships. The model places cities in four stages: Starters testing use cases, Implementers deploying AI in key domains, Accelerators fast-tracking transformation, and Leaders that have built AI-enabled operating systems tied to social, economic, and environmental outcomes.

AI leadership is not confined to any one region or city size. The 37 AI leading cities in the study include Amsterdam, Barcelona, and Dublin in Europe; Melbourne, Seoul, and Singapore in Asia-Pacific; Austin, Buenos Aires, Montreal, and Seattle in the Americas; and Abu Dhabi, Dubai, and Kigali in the Middle East and Africa. Global capitals such as London, Shanghai, and Tokyo sit alongside smaller cities such as Aarhus, Tampere, and Putrajaya.

From reactive to anticipatory government

AI Leaders see AI as an engine of urban transformation:

• 100% aim to become people-first, AI-powered cities.
• 95% are actively implementing policies to maintain sovereign control over sensitive city and citizen data.
• 89% say AI will become a key competitive and economic driver for their city.
• 84% expect AI to help deliver personalized, frictionless services to residents.

By linking data across departments, AI leading cities replace fragmented reactive processes with integrated workflows that coordinate action more effectively. Under the old model, the resident asks and the city responds. With AI, the city anticipates needs, heads off problems, and personalizes experiences. These cities think beyond efficiency; they use AI to solve their most pressing challenges, from managing infrastructure and cyberattacks to improving public safety, mobility, and urban development.

“AI gives our employees something incredibly valuable: time,” said Nicole Coughlin, CIO of Cary, North Carolina. “By reducing repetitive administrative work and surfacing better insights, it allows public servants to focus on the work that matters most—solving complex problems, collaborating across departments, and serving people.”

Trust is the deciding factor

What sets AI leading cities apart is how deliberately they put people first. Ninety-two percent train city employees in the ethical and responsible use of AI; 79% build fairness, transparency, and inclusion into AI planning; and 79% set formal transparency guidelines for AI-enabled services.

That focus matters because public confidence cannot be taken for granted. Sixty-nine percent of cities say public trust and acceptance of AI is one of their biggest challenges. Cities at every stage of AI adoption are responding. San Antonio uses AI only where it demonstrably improves resident outcomes, and city staff keep decision-making responsibility. Reykjavík grounds its approach in public value, fairness, and human oversight. And Amman designs AI-enabled services around the needs of women, older people, and people with disabilities.

“Leaders who treat these concerns as a communication challenge rather than a governance issue will erode the trust they’re trying to build,” said Geoffrey Urbach, Product and Partnerships Lead, Emerging Technology, San Antonio.

Free resources for city leaders

The research was guided by a coalition of more than 40 experts, including officials from Alatau City, Austin, Barcelona, Dublin, Kyiv, Pittsburgh, Reykjavík, and San Antonio; academics from Arizona State University, Cambridge, Carnegie Mellon, IESE, RIT Dubai, and the University of Southern California; and executives from the sponsoring companies, including Dell Technologies, FedEx, FTI Consulting, General Motors, Intel, Itron, Microsoft, NVIDIA and Wireside Communications.

Thanks to sponsor funding, ThoughtLab is offering the results to city governments free of charge. They include a comprehensive AI playbook for cities and the interactive AI City Navigator, which lets users compare cities’ AI maturity, explore the benchmarking data, AI plans, and case studies, and see the strategies that distinguish People-First AI Leaders. Access the Navigator here: https://ai-navigator.thoughtlabgroup.com/

About ThoughtLab Group

ThoughtLab Group is an innovative thought leadership firm that creates fresh ideas through rigorous research and economic analysis. The firm specializes in assessing the economic, financial, and social impact of emerging technologies on cities, companies, industries, and world markets. Its services include business, consumer, investor, and government surveys; executive interviews, meetings, and advisory groups; economic modeling; AI sentiment monitoring; benchmarking and performance analysis; and the development of white papers, eBooks, infographics, and customer-facing analytical tools.