Today profound transformation takes place in urban development, primarily driven by the advanced information and communication technologies (ICTs). The term “smart city” first emerged in the 1990s as a result of urbanization and the digital revolution. At that time, many people moved to cities, raised their living standards, and actively participated in the network economy. As a result, the concept of a smart city ceased to be an element of techno-utopian discourse and began to present smart technologies as a rational tool for solving various urban problems, forming a more open, flexible, and participatory format of the city. With the rapid development of AI, more tasks are transferred to smart algorithms. At its core, a smart city uses the power of AI to revolutionize urban areas, representing a shift toward more algorithmic, automated, and predictive models of city services. This chapter seeks to clarify the multifaceted applications of AI in the areas of smart cities, highlighting its key role in shaping and driving urban development. The symbiotic relationship between AI and smart cities is explored in detail, demonstrating how AI technologies play a significant role in optimizing resource allocation, improving decision-making processes, and ultimately enhancing the quality of life of citizens. The chapter highlights the interrelationship between progress in fundamental and applied research on AI technologies and urban development, highlighting how concerted efforts to develop AI capabilities can propel cities toward a future characterized by sustainable growth.