Artificial intelligence (AI) is one of the pivoting elements in the realization of a smart city through sustainable enhancement of the quality of life of the citizens. When we integrate the urban management concept with AI technology, the existing challenges of urban lifestyles become more appealing and easier to deal with. This chapter describes how AI helps to enhance the smart city infrastructure in terms of resource optimization, energy consumption, traffic management, waste disposal, and water management with respect to the smart and efficient functioning of the city. The current state-of-the-art research is also carried out pertaining to the use of AI in developing sustainable smart cities. Smart grids powered by AI, along with IoT sensors, enable real-time data collection and analysis, significantly enhancing the resilience and sustainability of urban environments. AI also advances public safety and security through enhanced surveillance mechanisms, predictive policing, improved emergency response systems, and other applications. The chapter further discusses the AI-powered platforms that aim to deliver personalized services in healthcare, transportation, manufacturing, education, and governance, tailored to the diverse needs of the urban population. In transportation, AI integration enables seamless mobility solutions, including autonomous vehicles and smart parking. It results in reduced congestion and carbon emissions, thus contributing to environmental sustainability. The chapter explains the various AI-driven Industry 5.0 application domains aiming to provide synergy between man and machine through efficient data-driven decision-making. In the end, the role of AI-enhanced virtual assistants and chatbots in boosting citizen engagement and streamlining service delivery is presented. This promotes greater transparency and accountability in governance.