Today’s smart cities market is about $835 billion, which is a very impressive market right now, but forecasts project that by 2030, that market will soar to $3.7 trillion.

Some of these new “smart” opportunities include:

• From the planning of new cities, or redevelopments, reconstruction, city expansions, and so on, AI tools can help: Vast data sets can be analyzed that help better predict what traffic flows may look like in the future, thus allowing for more efficient road planning, AI tools can help estimate how many homes and apartments will be needed at specific times, thereby better matching supply with demand, and digital twinning can help model cities or new construction in a way that makes them look appealing for those that live there by “testing out” different approaches.  

• AI can help make cities safer. AI tools can help predict the likelihood and impact of a wide range of natural disasters, so that cities can be planned in a way that minimizes risks, or that safety measures can be installed when there is still time, while also optimizing evacuation routes, etc. When it comes to crime prevention, AI can help, too, by optimizing lighting and CCTV in at-risk areas. Optimizing traffic is another way to make cities safer, via better lighting, safer road design, smart speed controls, and so on.

• AI helps with making cities more efficient: Data about consumer behavior can optimize the match between electricity generation and electricity demand, for example, while smart traffic controls can help prevent congestion and result in better traffic flow. Predicting how many people want to go where at specific times allows cities to use their public transport assets more efficiently — by having more metro trains run from A to B during some conditions and by having more metro trains going the A to C route under other conditions (time of day, weekday/weekend, dependent on weather, season, and so on).

 Investing in the AI-powered Better Cities MegaTrend

We can’t buy shares in cities that use smart/better city AI tools, such as Singapore, Dubai, or Tokyo, but we can invest in some of the companies that power this trend from the software or hardware side, without them being Old Economy infrastructure or home building companies themselves.  

Some of these tech companies that will benefit from increased AI use across major urban areas include Cisco Systems (NASDAQ: CSCO), Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Qualcomm (NASDAQ: QCOM) or NVIDIA (NASDAQ: NVDA).

Smart cities require a huge amount of sensors that track all kinds of data; where people move, how much energy they consume, noise and air pollution levels, etc. CSCO and QCOM are leading companies that provide the sensors and the connectivity equipment to collect and deliver all this data.

When it comes to processing this data, NVDA’s GPUs are above everything else, so more AI use will result in higher demand for NVIDIA’s chips.

Companies like MSFT and AMZN will benefit via their cloud computing businesses that allow cities to outsource data management and that are sought-after partners for building out AI infrastructure. GOOG has its cloud, its new generation Tensor chips, and its fast-expanding Waymo unit, at the forefront of making transportation smarter, cheaper, and safer in urban areas.

Investors that are interested in broader exposure to the world of tech and Artificial Intelligence should take a look at our top picks.