The term “Smart City” describes urban areas that use advanced technologies, sensors, and so on for data collection that is used to optimize processes, operations, and services in and around the city.

As an example, sensors may detect how many drivers are driving in a specific direction at a specific time, which allows for the optimization of traffic light phases. 

While the term “Smart City” isn’t very old, it existed before AI made a big splash a couple of years ago, and Smart City technologies don’t necessarily require the use of AI. Data can be collected and used without AI, just in less sophisticated and more time-consuming ways.

There’s a big need to make cities smarter and more efficient, especially in megacities, such as the following ones:

(source: statista.com)

While it’s possible to manage a population of 10,000 without the use of advanced technologies and AI, things become more complicated as cities grow – and megacities, such as Tokyo with almost 40 million people, are hard to manage.

Major cities will continue to grow, according to many forecasts – Forbes believes that two-thirds of the world’s population will live in cities by 2050. To improve efficiencies, reduce costs and emissions, and improve the way of life of the people living in large agglomerations, using advanced technologies is an obvious choice.

AI Makes Smart Cities Smarter

AI will allow for the development of self-driving vehicles, which will help improve traffic in densely populated areas. Vehicles can find the least congested routes themselves, can communicate with each other to find out about parking spots, and there will be fewer accidents and crashes.

AI will help predict where infrastructure expansion and investment (e.g. electrical grid, fiber networks, and so on) will be required in the future as the city grows and more people move in, thereby allowing city planners to allocate resources timelier. 

AI will help detect issues with water and air quality, thereby improving public health and allowing for emission reductions at the same time.

How To Benefit from The Smart City of The Future

Investors can choose among some of our Artificial Intelligence picks to benefit from increased Smart City investments in the future. Some of the AI players that are poised to benefit from the rise of Smart Cities around the globe include the following:

NVIDIA (NASDAQ: NVDA) is the leading AI chip company in the world. Its chips are powering data centers where data from all kinds of sensors is used to feed algorithms, including ones that will help power Smart Cities in the future.

Qualcomm (NASDAQ: QCOM) is a chip company that holds a wide range of 3G, 4G, and 5G patents and thus benefits from more and more sensors that communicate with each other. On top of that, Qualcomm’s own sensors are used in smart vehicles that will be a key factor of smarter and more efficient cities in the future.

IBM (NYSE: IBM) is a company that has AI tech itself, but that also helps implement AI tech and other advanced technologies across the globe. Planning smart city infrastructure for a diverse range of very different cities will require expert knowledge, and IBM will offer that.