Integrating artificial intelligence (AI) into smart city initiatives holds immense potential to enhance urban sustainability, efficiency, and livability. However, the ethical and effective implementation of AI technologies in smart cities requires developing and implementing robust policies and governance frameworks. This paper explores the landscape of emerging policies to guide the ethical and effective deployment of AI in smart cities. The study utilised the Strength, Weaknesses, Opportunities and Threats (SWOT) Analysis to examine the AI policies of three Northern European countries: the United Kingdom, Norway and Denmark. Key findings reveal that the UK emphasises clear financial commitments and strategic planning, positioning itself as a leader in rapid AI advancements. Norway prioritises interoperability and privacy standards, which are crucial for integrating AI across sectors. At the same time, Denmark leverages its digitisation prowess and ethical AI frameworks to foster innovation and attract global talent. Despite these strengths, all three nations face economic instability, skill shortages, and international competition for AI resources. The study underscores the importance of collaborative efforts to establish unified AI standards, invest in education and training, and align AI strategies with global environmental and ethical goals.